Will prime real estate in the UK become a safe haven asset again?

London's reputation as a safe haven is being restored by the influx of foreign buyers drawn to its affordable prime central property

Amid worries over Trump tariffs and stock market volatility, cautious investors have been pouring money into so-called safe haven assets.

Due to this, the price of gold has reached a record high, but it's also possible that another asset is acting as a safe haven property.

US President Donald Trump's trade policies may hurt the UK economy, but they may also help the real estate market as mortgage prices decline due to declining swap rates, according to research by real estate company Knight Frank.

Knight Frank adds that foreign buyers, particularly Americans wishing to leave the US, are increasingly interested in purchasing prime London real estate.

This could be especially beneficial for London's prime real estate market, which has seen high taxes and Brexit threaten its reputation as a safe haven in recent years, drawing in buyers looking to safeguard their wealth.

US buyers, especially those seeking to flee the Trump administration, are particularly drawn to UK real estate, according to Tom Kain, a partner at buying agency Black Brick.

Because of London's stagnant prices and the GBP's depreciation against the USD, foreign buyers find the British capital to be surprisingly affordable, he said. The United States and the Middle East, whose currencies are frequently based on the dollar, are seeing a surge in purchases as a result.

"Because of the common language and the sense of belonging, London is the ideal destination for American consumers.

Is there a resurgence of interest in prime real estate?

According to Knight Frank data, average prices of prime central London real estate increased by 68 percent between 2009 and 2014, making it a well-known safe haven investment choice during the entire global financial crisis.

The real estate brand notes that average prices in prime central London are currently 18 percent lower than the last peak in mid-2015, but it also suggests that this rate of growth is unlikely to occur again.

Tom Bill, the head of residential research at Knight Franks, says that will seem like especially good value for some people, especially when combined with the pound's relative weakness compared to the dollar.

"International buyers who are denominated in or tied to the US dollar would benefit from a relative discount of 37 percent compared to July 2014," he stated.

The United States accounted for 60.9 percent of all buyers of prime central London in the first quarter of 2025, according to Knight Frank data. This was the third-highest percentage for a single quarter in a decade.

Buyers may benefit from declining mortgage rates following Trump's tariff announcements, even though stamp duty rates for foreign buyers and second home owners are higher.

Knight Frank reports that the five-year SONIA swap rate ended Thursday's trading at 33.7 percent, down from over 4 percent at the end of March prior to the initial tariff announcement.

How does prime real estate in the UK stack up as a safe haven investment?

Since the announcement of US trade tariffs and the ensuing conflicting messages from the White House, sell-offs have affected both the FTSE 100 and SandP 500, making global stock markets erratic in recent weeks.

Although the price of gold has also reached a record high and is 40% higher than it was a year ago, it is more difficult to make money off of the yellow metal, and it is not yet clear if it has peaked.

On the other hand, prime real estate in London is currently viewed as being inexpensive.

The UK appears to be a reasonably politically stable place to invest in real estate, Bill continues, adding that the eurozone has its own structural economic issues and poor growth prospects in the former German powerhouse.

Due to political unpredictability and economic instability elsewhere in the world, Bill stated: "International buyers and tenants are paying closer attention to the UK.

Since the Bank of England is anticipated to make more aggressive cuts to support the UK economy, beginning with a 0 point 25 percent reduction next week, the tariff turbulence of recent weeks has caused mortgage rates to decline.

"To put it simply, Donald Trump has somewhat reduced the cost of purchasing a home in the UK.

This month's HMRC research also emphasized "safety" as a factor in foreign buyers' decisions to buy UK real estate.

According to the survey, 42% of foreign buyers who bought real estate in the UK thought it was a secure investment.

Naturally, even safe havens carry some risk because there is no assurance that gold, real estate, or any other trending item won't decline in value.

"As a financial planner, your financial plan is the safest place right now," stated Wes Wilkes, CEO of IronMarket Wealth. Although this time is difficult, unpleasant, and concerning, this kind of volatility is inevitable in any sound financial plan. The safest course of action is to make sure you're on track by checking in on your plan. With that knowledge, switch off the news and carry on with your day.