Imagine a family in London with £554,000 to put into a second property. That is the average price of a London property today. It could buy a flat in London, or an apartment in Dubai with money left over. Here is how the two cities compare on price, rent, buying costs and UK tax, with the April 2025 tax changes included.
By Umer Shauket, Founder & CEO, Cresco Real Estate. RERA ORN 34288. Published 11 November 2026.
The short answer
- London’s average price was £554,000 in August 2026, down 2.2% in a year. London flats fell 5.0% (ONS).
- Dubai apartments averaged AED 1,828,563, about £371,128, with a 6.14% average gross yield (Property Finder).
- On a second property at £554,000, London stamp duty is about £45,400. The Dubai Land Department fee on the same money is about £22,160.
- If you live in the UK, HMRC taxes your Dubai rent and gains. The UAE does not.
Who this is for
The 2021 Census counted 1,864,304 people in the Indian ethnic group in England and Wales, 3.1% of the population (GOV.UK Ethnicity facts and figures). They show up in Dubai too. Anarock put Indians at 22% of Dubai buyers in 2025 and British buyers at 17%, the two largest groups (Khaleej Times). A British Indian buyer sits in both. For why Indians buy in Dubai at all, read why Indians are Dubai’s biggest buyers. For the full UK rules, read how British buyers can buy property in Dubai. This piece only compares the two cities.
London against Dubai: price, rent and yield
| London | Dubai apartments | |
|---|---|---|
| Average price | £554,000 (August 2026) | AED 1,828,563, about £371,128 |
| Change in a year | Down 2.2%; flats down 5.0% | Average sale price slipped against the previous period |
| Average rent | £2,338 a month (September 2026) | Not published as one figure |
| Gross rental yield | About 5.1% (average rent against average price) | 6.14% average; 6.6% in Q3 (Cavendish Maxwell) |
| Tax on rent in that city | UK Income Tax | None in the UAE |
London figures come from the Office for National Statistics (ONS, October 2026 release). The ONS says flats are half of all London sales, and London flat prices fell 5.0% in the year to August 2026 while London houses rose. London rents rose 3.5% in the year to September. The London yield is our division of the ONS average rent by the ONS average price. It mixes all property types, so read it as a rough guide.
Dubai figures are Property Finder averages of registered apartment sales over the last 12 months, read on 11 November 2026 (Property Finder). Cavendish Maxwell put Dubai apartment gross yields at 6.6% in Q3 2026 (Khaleej Times).
What £554,000 is in Dubai
| Dubai apartments | Average sale | In pounds | Per sq ft | Gross yield |
|---|---|---|---|---|
| All Dubai apartments | AED 1,828,563 | £371,128 | AED 1,908 | 6.14% |
| Jumeirah Village Circle | AED 1,082,042 | £219,613 | AED 1,504 | 7.50% |
| Dubai Hills Estate | AED 2,524,387 | £512,354 | AED 2,400 | 6.10% |
| Business Bay | AED 2,834,221 | £575,238 | AED 2,442 | 6.87% |
| Dubai Marina | AED 2,858,845 | £580,236 | AED 2,147 | 5.88% |
| Golden Visa threshold | AED 2,000,000 | £405,923 |
Pounds at about AED 4.93 per pound, from European Central Bank reference rates on 9 November 2026 and the dirham’s fixed peg to the US dollar (ECB). A UAE Golden Residency for 10 years needs property worth at least AED 2 million, about £405,923 (ICP). The London average price clears that threshold in Dubai.
The cost of buying
| Buying cost at £554,000 | London, second property | Dubai, same money |
|---|---|---|
| Main purchase tax | Stamp Duty Land Tax £45,400 | Dubai Land Department fee 4%: AED 109,183, about £22,160 |
| Share of the price | 8.2% | 4% |
| Registration | Included above | Registration trustee fee AED 4,200, about £852 |
| If you live outside the UK | Add 2%: £11,080 more | Same 4% for every nationality |
London stamp duty uses the current GOV.UK residential bands plus the 5% higher rate for buyers who already own a property (GOV.UK). Buyers who are not UK resident usually pay a further 2% in England (GOV.UK). That matters for British Indians already living in the Gulf. In Dubai, the Land Department transfer fee is 4%, and the registration trustee fee is AED 4,000 plus VAT for property above AED 500,000 (Bayut fee guide).
UK tax after April 2025
GOV.UK says that if you are UK resident you will normally pay tax on your foreign income, and it lists rental income on overseas property (GOV.UK). The UAE does not tax the rent, so there is usually no foreign tax to set against the UK bill. If you sell at a gain, UK Capital Gains Tax applies at 18% or 24%, with a £3,000 allowance for 2026 to 2027 (GOV.UK).
The big change came on 6 April 2025. The remittance basis ended. The new 4 year foreign income and gains regime covers foreign property profits, but only for people in their first 4 years of UK residence after at least 10 years as a non UK resident (GOV.UK). A new arrival from India may qualify. A family settled in the UK for years will not.
If you are not UK resident, GOV.UK says you will not pay UK tax on your foreign income. Residence is decided by the statutory residence test, not by passport.
What this means for a buyer
Imagine £554,000 going into a second property. In London, stamp duty takes about £45,400 before you collect any rent. At London’s average rent of £2,338 a month, the gross rent is £28,056 a year.
In Dubai, the same money is about AED 2,729,580. The Land Department fee is about £22,160. At the 6.14% average apartment yield, the gross rent would be about AED 167,596, or £34,016. These are averages across very different properties, used only to show the gap, not to promise a return.
For a UK resident, both rents are taxed in the UK. So the Dubai case rests on lower buying costs, a higher average gross yield, a dollar linked currency and the residence route. It does not rest on tax free rent. Service charges come off the rent every year in Dubai; see service charges and net yield.
The honest limits
The ONS London price is a mix adjusted average of all property types. The Property Finder figure is an average of apartment sales only. They are not the same measure. Both yields are gross, before costs, voids and tax. The pound floats against the dirham, so a sterling return can rise or fall with the exchange rate. Property Finder’s own summary says the average Dubai apartment price slipped against the previous period. Your tax position depends on your residence, your other income and your history. This is general information, not investment, tax or legal advice. Speak to a UK tax adviser before you buy.
Where to start
- Check what similar units actually sold for: how to check Dubai sold prices.
- Work out the full cost: Dubai property purchase costs.
- Read the UK rules: how British buyers can buy property in Dubai.
Frequently asked questions
Is Dubai cheaper than London for property?
On averages, yes. London’s average price was £554,000 in August 2026 (ONS). Dubai apartments sold for an average AED 1,828,563, about £371,128, over the last 12 months (Property Finder). They are different measures and different kinds of property, so treat the gap as a direction.
Do I pay UK tax on rent from a Dubai apartment?
If you are UK resident, normally yes. GOV.UK lists rental income on overseas property as foreign income. The UAE charges no tax on the rent, so there is usually no foreign tax to offset. If you are not UK resident, you do not pay UK tax on foreign income.
What changed for UK tax on overseas income in April 2025?
The remittance basis ended on 6 April 2025. Its replacement, the 4 year foreign income and gains regime, only covers people in their first 4 years of UK residence after at least 10 years of non residence. Most British Indians who have lived in the UK for years do not qualify.
How much stamp duty would a second London property cost?
At the London average of £554,000, a buyer who already owns a property pays about £45,400 under the current GOV.UK rates, including the 5% higher rate. A non UK resident usually pays a further 2%.
Sources: Office for National Statistics, Private rent and house prices, UK: October 2026; GOV.UK, Population of England and Wales, Census 2021; GOV.UK, Stamp Duty Land Tax residential rates; GOV.UK, SDLT rates for non UK residents; GOV.UK, Tax on foreign income; GOV.UK, 4 year foreign income and gains regime; GOV.UK, Capital Gains Tax rates; Khaleej Times, Anarock buyer shares; Khaleej Times, Cavendish Maxwell Q3 2026 yields; Property Finder transaction pages, Dubai Land Department data, last 12 months read 11 November 2026; Bayut, cost of buying property in Dubai; ICP, UAE Golden Residency; European Central Bank reference rates, 9 November 2026. General information, not investment, tax or legal advice.