UAE dominates UK overseas mortgage market 

• Middle East tops international sales
• 30% of UK brokers work with UAE
• Favourable exchange rate for overseas

Property buyers from the Middle East – particularly the UAE – are among the top international clients for UK mortgage brokers, according to new research.

About 30 percent of 300 brokers surveyed by investment company Raw Capital Partners said they had arranged mortgages for clients from the Middle East and UAE over the past five years.

This was the highest proportion of all geographical areas – alongside Europe, which also stood at 30 percent.

“The UK property market is still seen as a strong asset area, with solid assets, low inflation and relatively stable prices, especially at a time when there is [geopolitical] uncertainty in the Middle East,” Tim Parkes, chief executive of Raw Capital Partners, told AGBI.

The Middle East has traditionally been a hotspot for international investment into the UK property market, the Raw report said, with wealthy individuals seeking “the stability offered by foreign real estate”. 

In addition, economic and political turbulence in the past five years has caused the value of the pound to fluctuate and generally decline against other currencies, notably the dollar, creating a favourable exchange rate for overseas investors.

Over the past five years, the pound has barely exceeded 1.40 against the dollar and been as low as 1.15. It currently trades at 1.29 against the dollar. Gulf currencies, except Kuwait, are pegged to the dollar.

Mortgage brokers also reported an increase in purchases of UK real estate in recent months ahead of changes to the stamp duty land tax from April 1 that will lead to extra costs for buyers, Parkes said. 

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The stamp duty rate ranges from 5 percent to 12 percent of the purchase price, depending on the value of the property, the purchase date and whether one is a first-time buyer or multiple home owner. A 2 percent surcharge is added to rates for buyers who are non-UK residents.

Another factor in the Middle East’s share of UK mortgage brokering is British nationals migrating to the UAE, who in turn buy properties back home, according to Parkes.

Britain lost a net 10,800 millionaires in 2024, more than double the number in 2023 and more than any other country except China. Researcher New World Wealth attributes this in part to the Labour government’s first budget last year.

“There’s a huge number of UK nationals who go [to the UAE] to make money and they want to buy property,” Parkes said. “They are more likely to buy back home, even while living abroad.”

Lorraine Wright, senior mortgage sales manager at Skipton International, said about a quarter of the Guernsey-based lender’s clients are from the UAE and, of those, the majority are British expatriates.

Often the properties for which they are securing mortgages are not new investments, she said.

“The buyer may have had a home in the UK, moved abroad and then will be refinancing the existing property, or they may be converting it into a buy-to-let mortgage while they’re overseas.”