ONS figures show that at the end of 2014 shares in listed, UK-based companies were worth £1.7 trillion, and 54 per cent of their stock was owned by offshore investors, largely based in North America and Europe.
The figure was up nearly 10 percentage points from 2010.
In 1994, less than 20 per cent of the UK stock market was owned by foreign investors.
According to the ONS, the large increases since then reflect the increasing internationalisation of the London stock market and the ease with which overseas residents can invest in UK-quoted shares, through electronic trading for example
UK individuals own an estimated 12 per cent of quoted shares, up from the historic low of 10 per cent in 2010 and 2012, accounting for £206.2bn of UK shares.
UK financial institutions held around seven per cent of UK stocks, down from 12 per cent in 2010. UK insurance companies and pension funds also reduced their holdings.