London on discount: Gulf investors seize the opportunity

A recent Financial Times article highlighted a rise in interest from wealthy UAE residents in prime London residential property. Some commentators linked this trend to the introduction of the four-year foreign income and gains (FIG) regime and to a subdued property market, which is seeing muted growth amid speculation of potential tax increases on higher-value homes. While there is no doubt that interest from the Gulf is increasing, our experience suggests the drivers are more complex.

We are seeing inquiries not only from the UAE but also from Kuwait, Saudi Arabia and across the wider GCC. This is not confined to one jurisdiction but reflects a regional pattern of families and family offices reconsidering London.

It is tempting to point to the FIG regime as the main driver, but in practice its benefits are not materially greater than those available under the former non-dom rules. For many families, it is less attractive. The requirement to disclose worldwide FIG in each relevant tax year, even where an individual is only UK-resident for a short period, can be uncomfortable for families who prioritise confidentiality. Under the previous remittance basis, unremitted foreign income and gains did not need to be reported, which better aligned with that preference for discretion, particularly in the Middle East.

Immigration considerations also play a major part in this. Since the closure of the Investor visa in 2022, there is no straightforward passive route to establish residence. GCC nationals may benefit from the Electronic Travel Authorization scheme to enter the UK, but this allows a maximum stay of six months at a time. Families looking to establish a long-term base often need alternative visa routes, which typically require endorsement, sponsorship or family connections, which do not suit every case.

Despite these challenges, Gulf investors are active mainly because of value. According to the Financial Times, average prices in Kensington and Chelsea in May 2025 were at their lowest level since 2013. Savills has reported that prime central London values remain around 22 percent below their 2014 peak. For families and family offices that deploy capital on a cyclical basis, this represents an opportunity to acquire London property at a relative discount.

In our view, it is this pricing dynamic that explains the current appetite from the Gulf, rather than the FIG regime. London retains its position as a global city of enduring appeal, and many families see current market conditions as an opportune moment to invest. At Boodle Hatfield, we are advising clients across the region who want to take advantage of the market downturn, and our experience shows that coordinated legal advice on tax, immigration and property is essential to making those decisions with confidence.