Is UK prime property making a comeback as a safe haven asset?

Cautious investors have been flocking to so-called safe haven assets amid concerns about Trump tariffs and stock market volatility.

This has helped the gold price hit a record high but another asset may also be making a combat as a safe haven – property.

Analysis by property brand Knight Frank suggests that US president Donald Trump’s trade policy, while potentially weakening the UK economy, could boost the property market as falling swap rates push down mortgage pricing.

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Knight Frank also suggests that prime London property is becoming more popular for international buyers, especially Americans looking to exit the US.

This could particularly help London’s prime property market – which had seen its safe haven status threatened by Brexit and higher taxes in recent years – attract buyers as a place to protect their wealth again.

Tom Kain, partner at buying agent Black Brick, says US buyers are particularly attracted to UK property, especially those looking to escape the Trump regime.

He said: “The flip side of London’s stagnant prices, coupled with the weakness of the GBP versus the USD, is that to overseas buyers the British capital feels like surprisingly good value. This is driving a rush of buyers from the USA and the Middle East, where currencies tend to be pegged to the dollar.

“London is the natural place for people from the USA to buy because of the shared language, and they just feel at home here.”

Is prime property making a comeback for investors?

Prime central London property was famously a safe haven investment of choice during the global financial crisis, with Knight Frank data showing that average prices rose by 68% between 2009 and 2014.

The property brand suggests this level of growth is unlikely again but it highlights that average prices in prime central London are now 18% lower than the last peak in mid-2015.

That will look like particularly good value for some, suggests Knight Frank’s head of residential research Tom Bill, especially combined with the relative weakness of the pound to the dollar.

He said: “Overseas buyers denominated in or pegged to the US dollar would benefit from a relative discount of 37% compared to July 2014.”

Knight Frank data also shows that the United States accounted for 6.9% of all prime central London buyers in the first quarter of 2025, which was the third highest figure for a single quarter in ten years.

Despite higher stamp duty rates for international buyers and second home owners, buyers may also be boosted by falling mortgage rates since Trump’s tariff announcements.

The five-year SONIA swap rate closed trading at 3.7% last Thursday, which compared with a figure of more than 4% at the end of March before the first tariff announcement, according to Knight Frank.

How does UK prime property compare as a safe haven asset?

Global stock markets have been volatile in recent weeks, with both the FTSE 100 and S&P 500 suffering from sell-offs following the announcement of US trade tariffs and the subsequent mixed messages sent from the White House.

The gold price has also hit a record high and is 40% above where it was a year ago but it is harder to generate an income from the yellow metal and it is unclear whether it has peaked.

In contrast, London prime property is currently seen as cheap.

Meanwhile, Bill adds that the eurozone faces its own structural economic problems, as well as weak growth prospects in the former powerhouse of Germany, making the UK look relatively politically stable as a location for investing in property.

Bill said: “International buyers and tenants are looking more closely at the UK due to economic instability and political uncertainty elsewhere in the world.

“The tariff turbulence of recent weeks has put downwards pressure on mortgage rates as the Bank of England is expected to cut more proactively to support the UK economy, starting with a 0.25% reduction next week.

“In simple terms, Donald Trump has made buying a house in the UK slightly cheaper.”

Research released by HMRC this month also highlighted 'safety' as a reason for overseas buyers purchasing UK property.

The research found that 42% of overseas buyers who purchased property in the UK saw it as a safe investment.

But there are, of course, risks with all safe havens as there is no guarantee that property prices and gold, or whatever is trending, won’t drop.

Wes Wilkes, chief executive of IronMarket Wealth, said: “As a financial planner, the absolute safest place right now is your financial plan. This period is rough, ugly and worrying, but any financial plan worth its salt has this type of volatility built in. So, the safest place is to check in on your plan and know that you're on track. Knowing that, turn the news off and go about your day.”