Five years ago a Saudi investor comparing London with Riyadh was comparing a deep, slow, taxed market with a thin, administered one. Vision 2030 has changed the second half of that sentence: Riyadh’s population, prices and rents have risen faster than any major city’s, the giga-projects have created a new-build market from nothing, and from 2026 foreigners may own in designated zones. Neither market wins on every line, and the question is what the London holding is for.
Market notes
London or Riyadh? Property for a Saudi investor as Vision 2030 reshapes the home market
London or Riyadh property for a Saudi investor: the table
Riyadh wins on income and growth: yields of 5 to 8 per cent kept in full, a 5 per cent transaction tax and no tax on rent, sale or inheritance for a Saudi individual. London wins on certainty, depth and distance: state-guaranteed title, a buyer for a good flat in any year, and sterling at 1.33 in a different cycle from the riyal. The catch is UK tax: stamp duty of £113,750 on a £1,000,000 second home and inheritance tax at 40 per cent above £325,000 unless planned for.
The two markets side by side on the points that matter to a Saudi investor:
London and Riyadh compared, 2026
| Point | London | Riyadh |
|---|---|---|
| Gross rental yield, good residential | 3 to 4 per cent prime; 4.5 to 5.5 ordinary | 5 to 8 per cent, higher on villas let to corporates |
| Purchase cost for a Saudi buyer | Stamp duty 11 to 16 per cent on a second home | Real estate transaction tax 5 per cent; white land tax on undeveloped plots |
| Tax on rent | UK income tax 20 to 45 per cent on profit | None for a Saudi individual; zakat for a company |
| Tax on sale | Capital gains tax 18 or 24 per cent | None for an individual |
| Inheritance | UK inheritance tax 40 per cent above allowances | None; Sharia succession |
| Tenure | Freehold or long lease, Land Registry title | Freehold title deed, now digital through the Real Estate General Authority |
| Tenant law | Periodic tenancies, landlord recovers on grounds, rent rises once a year | Ejar registered contracts, annual terms, rent-cap rules introduced in Riyadh in 2025 |
| Price history | Prime flat since 2014 in sterling; London average down 3.3 per cent in the year to July 2026 | Riyadh residential prices up sharply since 2021, with villas and land leading |
| Liquidity | Deep: a buyer for a good flat in any year | Improving; thin at the top, strong for new villas |
| Currency | Sterling, floating; cheap in dollars by its own history | Riyal, pegged to the dollar |
| Foreign buyers | Open to anyone | Opening from 2026 in designated zones, with REGA approval |
Source: ONS private rent and house prices bulletin, September 2026; GOV.UK inheritance tax guidance; Real Estate General Authority, Saudi Arabia; BCLP note on the foreign ownership law, July 2025.
The case for buying property in Riyadh
Growth, yield and no tax. Riyadh is the capital of a country spending its way to a new economy, and its housing market has the demand of a city growing by hundreds of thousands a year, a government that wants home ownership at 70 per cent, and a mortgage market built in a decade. Yields on villas and new apartments are double London’s and are kept in full. Transaction costs are a third of London’s.
The new buyer pool
A Saudi investor who wants income and growth in his own currency and legal system has had, since 2021, no reason to look abroad for either. The new foreign-ownership law adds a buyer pool and, in the designated zones, a reason to expect liquidity to improve. The firm’s clients in Riyadh who own only at home have done well.
The case for buying property in London
Certainty, depth and distance. Title at the Land Registry is state-guaranteed and three centuries of case law sit behind the lease; the courts are the ones the world’s contracts choose. The market is deep enough that a good flat sells in any year, including the years when nothing sells at home. The currency floats, which is the point: a Saudi investor’s wealth is in riyals, pegged to dollars, and sterling at 1.33 is a different asset in a different cycle.
London supply, prices and the family's own use
Supply in the established districts is fixed. Prices are at 2014 levels in sterling and a third below in dollars, as our note on London property prices in 2026 sets out. And London is somewhere the family may need to be: for a child at Imperial, for the Cromwell Hospital or Harley Street, for a summer, for a year of work. Riyadh’s rise is the reason some Saudi families are now placing a share of what they have made outside the Kingdom, not the reason to stop.
London and Riyadh property taxes in practice on £1,000,000
On a £1,000,000 London flat bought as a second home by a Riyadh resident: stamp duty £113,750; income tax on rent of £42,000 with £10,000 of costs, about £6,400 for a buyer without the personal allowance; capital gains tax on a £300,000 gain after seven years, about £71,000; inheritance tax on the whole value above £325,000 at 40 per cent if nothing is planned. In Riyadh the same money pays 5 per cent to buy and nothing thereafter.
Which London taxes a Saudi investor should plan for
The London taxes are real and are the price of the London case; the inheritance tax is the one to plan for, through the will and the structure our guides on inheritance tax for Gulf families and on an English will for a Gulf family explain, and the others are costs to model, not reasons not to buy.
Saudi Arabia's new foreign ownership law for real estate
The Saudi Cabinet approved a new law on foreign ownership of real estate in July 2025, in force from January 2026, under which non-Saudi individuals and companies may own property in zones designated by the Real Estate General Authority, with Riyadh and Jeddah named first and Makkah and Madinah subject to additional controls. It replaces a regime in which foreign ownership was limited to residents with permission and to licensed developers.
What the foreign ownership law changes for a Saudi investor
For a Saudi investor the law does not change what he can buy at home; it changes who else can, which should deepen the market in the designated zones over time and may, in the firm’s view, support prices there and raise rents as foreign companies house staff. It does not alter the comparison with London, which rests on tax, tenure and currency rather than on who may buy.
Diversification: why a Saudi family might hold London property
A Saudi family whose wealth is in Saudi property, Saudi equities and a Saudi business has one currency, one legal system and one economy. A London flat is the simplest way to hold a meaningful sum in another: sterling-denominated, governed by English law, let to tenants whose jobs do not depend on oil or on Vision 2030, and saleable in a year when the Tadawul is closed to sentiment.
What diversifying into London property costs a Saudi family
The yield is lower and the tax higher; that is what the diversification costs, and it is the firm’s view that for a family above a certain size it is a cost worth paying on a tenth or a fifth of the whole, not on half.
Our position on London or Riyadh property for Saudis
For income and growth, Riyadh, and the firm says so. For a store of value in another jurisdiction, in a currency and a legal system independent of the Gulf, with a home the family can use, London. The London holding should be a flat or house the family would be content to own for twenty years, bought at its neighbours’ price in a district the family knows, held in the right names with a will and a tax plan, and let or used with the Renters’ Rights Act and the council tax premium understood.
What a London property holding should not be
What it should not be is a brochure flat bought at a Riyadh exhibition because the yield looked like Riyadh’s; it never does. Our London or Dubai comparison makes the same point for an investor in the UAE.
Sources: Private rent and house prices, UK: September 2026 (ONS) · Saudi Cabinet approves new law on foreign ownership of real estate (BCLP, July 2025) · Real Estate General Authority, Saudi Arabia · Inheritance tax (GOV.UK) Figures verified 14 October 2026.
Frequently Asked
Questions about London or Riyadh for Saudi investors
For the other things: the currency, the title, the courts, the depth, the family’s use. If none of those matter to you, Riyadh is the answer and the firm will say so.
Probably, in the designated zones, over years rather than months; it widens the buyer pool and the corporate tenant pool. It does not change the tax or currency comparison with London.
A share small enough that the yield does not matter and large enough that the diversification does; for most families the firm advises between a tenth and a fifth, and never a London purchase financed by selling the Riyadh business.
Stamp duty of £113,750 on a £1,000,000 flat bought as a second home by a Riyadh resident, within the 11 to 16 per cent range that applies to a second home. In Riyadh the same money pays the real estate transaction tax of 5 per cent and nothing thereafter. Transaction costs in Riyadh are a third of London’s.
UK income tax at 20 to 45 per cent on profit. On rent of £42,000 a year with £10,000 of costs, a buyer without the personal allowance pays about £6,400. A Saudi individual pays nothing on rent at home, and a company pays zakat. The firm treats this as a cost to model, not a reason not to buy.
Capital gains tax at 18 or 24 per cent on the gain. On a £300,000 gain after seven years that is about £71,000. An individual pays no tax on sale in Riyadh.
Yes, at 40 per cent on the whole value above £325,000 if nothing is planned. It is the one London tax to plan for, through the will and the structure that our guides on inheritance tax for Gulf families and on an English will for a Gulf family explain. Riyadh has no inheritance tax; Sharia succession applies.
The Saudi Cabinet approved it in July 2025 and it is in force from January 2026. Non-Saudi individuals and companies may own property in zones designated by the Real Estate General Authority, with Riyadh and Jeddah named first and Makkah and Madinah subject to additional controls. It replaces a regime in which foreign ownership was limited to residents with permission and to licensed developers. It changes who else can buy at home, not what a Saudi investor can buy.
A family whose wealth is in Saudi property, Saudi equities and a Saudi business has one currency, one legal system and one economy. A London flat is the simplest way to hold a meaningful sum in another: sterling-denominated, governed by English law, let to tenants whose jobs do not depend on oil or on Vision 2030, and saleable in a year when the Tadawul is closed to sentiment. The firm advises a tenth or a fifth of the whole, not half.
A flat or house the family would be content to own for twenty years, bought at its neighbours’ price in a district the family knows, held in the right names with a will and a tax plan, and let or used with the Renters’ Rights Act and the council tax premium understood. Not a brochure flat bought at a Riyadh exhibition because the yield looked like Riyadh’s; it never does.
