As we look ahead to the new year, London’s prime property market is entering a new phase. Despite warnings about the wider market in Britain, we expect London to continue to lead the way in 2026.
The past year has delivered a mix of policy intervention, public debate, and rising regulatory complexity, all of which have shaped the mindset of international high-net-worth investors considering the UK.
Yet the essential truth remains unchanged: London is still seen as a stable jurisdiction with strong legal protections, a transparent system of ownership, and a real estate market that performs reliably over long horizons. The challenge for 2026 will be less centred on simple demand and supply, and more on confidence and the ability of buyers to navigate a shifting environment.
The 2025 Budget – Is it a “Mansion Tax”?
The Chancellor’s 2025 Autumn Statement introduced a surcharge on properties over £2 million. As RSL LAW CEO Tatiana Sharposhnikova told Property Week at the time, this is a blunt policy intervention which may have unintended consequences.
£2 million is no longer the mark of the ultra-wealthy. In parts of London and the South East, it is simply the going rate for homes that would once have been considered comfortably middle-upper tier. But an average £4,000 annual levy will not deter serious purchasers. Our international clients often see it as a manageable, even modest cost compared to wealth taxes in other jurisdictions.
But in 2026, the question is less about quantum and more about trajectory. Does the UK remain a predictable environment for investment? Will future adjustments be proportionate or reactive? Investors from Eastern Europe, the Middle East and Asia, all key drivers of prime London activity, routinely tell us the same thing:
They can price in a tax. They cannot price in uncertainty.
If the UK maintains clarity and consistency in its property taxation framework throughout 2026, we expect inward investment to remain resilient, supported by favourable currency conditions and an undersupplied prime market.
Fighting Unfairness for Overseas Buyers
2025 also delivered something less tangible, but arguably more damaging: a shift in public sentiment. Overseas purchasers, even long-term British residents with overseas links, increasingly reported encountering a climate of scrutiny and, at times, outright suspicion.
Compliance checks are becoming lengthier. Source-of-funds enquiries more intrusive. Some mainstream lenders are quietly limiting exposure to clients with complex international financial profiles. And in conveyancing, we see more cases where buyers are treated as “high risk” by default, despite having fully documented, legitimate wealth.
RSL LAW has been campaigning on this issue for a number of months. We stand firm that risk management must not become indiscriminate gatekeeping. Unfortunately, that boundary now blurs more easily than it once did.
In 2026, international investors should expect enhanced due diligence to remain the norm, because political narratives still emphasise enforcement over efficiency. Those with well-prepared documentation, professional representation, and clear transaction structures will fare best.
Read more about RSL LAW’s campaign to end discrimination for buyers in our October 2025 blog.
Cyber risk and regulatory pressure: The new front line of property investment
The property market is now a digital market. Funds are transferred electronically, identity is verified remotely, and key transaction data passes through multiple regulated entities. This has created two parallel trends that will define 2026:
Increased regulatory demands
Estate agents, conveyancers and lenders are under rising pressure to demonstrate compliance. Expect more requests, more verification steps, and more friction, especially for complex, cross-border transactions.
Increased exposure to cybercrime
Property transactions remain a favourite target for sophisticated fraudsters. In 2025, we saw an escalation in attempts to intercept client funds, spoof law firms, and exploit gaps in communication channels.
Read more about the cyber risks facing buyers and conveyancers in our November 2025 blog.
For high-net-worth buyers, especially those based overseas, the due-diligence burden has never been more visible, or more essential.
We expect this dual trend to intensify in 2026, prompting more investors to seek boutique legal representation rather than rely solely on volume-focused firms.
So what does 2026 look like for international property investors?
Resilient but highly scrutinised.
Demand in prime areas is set to remain strong, with supply constraints pushing prices steadily upward.
Stable but not static.
Government policy is unlikely to reverse course, but further refinements cannot be ruled out. Market confidence will hinge on communication and transparency, not just legislation.
Rewarding for those who prepare well.
Investors who understand the new compliance culture, and work with advisers who can anticipate delays, structure documentation, and protect transactions from cyber threats, will find London remains one of the world’s most attractive destinations for capital.
London and the UK have not lost their edge. They have simply raised the bar!
For high-net-worth international buyers, 2026 offers opportunity, but only for those who approach the market with clarity, proper preparation, and specialist guidance. The UK remains open for investment, but it rewards those who recognise that reputation, risk and regulation now move together.
At RSL LAW, our role is to help clients navigate this evolving landscape with confidence, ensuring that strategic opportunities are not lost amid administrative noise.
If you’d like tailored advice on buying or investing in UK property in 2026, our international team is always ready to assist.
Happy New Year from all of us at RSL LAW.