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Rising numbers of expats and foreign buyers eye UK property market’s opportunities

Mortgage brokers, banks and property market professionals have reported rising interest from foreign buyers and expats looking to snap up homes here in the UK.

UK nationals living or working abroad and foreign investors from the US, Canada and East Asian countries are cashing on a weaker pound, a price slump in London’s new-build market and renewed confidence in the UK’s economy and vaccine programme.

Meanwhile political turbulence in China and the UK government’s new Visa scheme, open to holders of British National Overseas (BNO) passports in Hong Kong giving citizens the chance to relocate, has also driven up overseas interest in UK property.

Since the start of the year, bank’s say they have seen foreign income mortgage business rise.

Skipton International reported a trebling of mortgage completions from Hong Kong residents purchasing buy-to-let properties in the first quarter of 2021. Furthermore, between January to May the bank saw a 34 per cent increase in enquiries from residents in the EU compared to August to December 2020.

For Hong Kong buyers, both London and the South East of England were the most popular locations closely followed by the North West and Midlands.

Roger Hughes, Skipton International’s business development manager, said investors saw the UK as a “solid and stable jurisdiction”.

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Mortgage brokers have also reported more interest from overseas buyers.

Richard Campo said between March and April he saw a 137 per cent rise in enquiries about foreign income mortgages.

“We noticed a huge spike in enquiries from buyers living abroad wanting more information about getting a mortgage supported by foreign income, way above what we have seen elsewhere in the business,” he said.

“It’s logical as lockdown restrictions ease and pent up demand is released coupled with the vaccine roll-out going well. What’s interesting though is that they are not super-high-end buyers. We’re seeing a lot of expats and new buyers looking around the £500,000 mark.”

East Asian interest

New-build snagging and property management firm BuildScan said in May it saw an 18 per cent year-on-year rise in enquiries from East Asian buyers who had recently purchased new-build properties in London.

According to the firm’s analysis, the impact of a weaker pound and lower new-build property prices dampened by the pandemic offered opportunities for East Asian investors.

Between January 2020 and December, the health crisis caused new-build property prices in the Capital to fall by 3.4 per cent to £488,371.

But fluctuating exchange rates meant South Korean homebuyers would have benefitted from a 6.8 per cent fall in prices when compared to the average price at the start of the year. Chinese buyers saw a 6.2 per cent drop and Japanese buyers a decline of 5.6 per cent.

Homebuyers from Thailand, Malaysia and Hong Kong would have secured smaller discounts of between 0.9 per cent and 1.8 per cent.

Harry Yates, founder and managing director of BuildScan, said: “Despite the problems posed by the pandemic, we’ve continued to see a high degree of interest in the London market from East Asia.

“This has been driven, in part, by factors such as BNO visa availability for those relocating from Hong Kong, as well as the opportunity to cash in on a stamp duty saving.

“Fluctuating exchange rates have also boosted the affordability of London new-build homes which has also caused many savvy investors to act sooner rather than later. Although the pound has rallied of late, the London market remains an area of focus for many foreign buyers.”

Oxford estate agent Wallers has also reported a rise in enquiries in non-European overseas buyers over the past six to nine months, particularly from the Far East. He also noted a significant proportion of the enquiries were from families from Hong Kong who want to relocate to a different part of the world because of political troubles.

He added: “We have also seen more enquiries than normal from buyers in the USA and Canada, and there has been a sense that they are seeing the UK in more attractive terms now that it is out of the EU, which has been contrary to my own preconceived ideas about what Brexit might do to our property market.”

Safe bet

David Baker said his firm was being contacted by UK nationals who work or live overseas in the US and Dubai and they want to buy in the UK either for a family member or to rent it out. He is also seeing interest around the £500,000 price point. They have also had enquiries from British citizens working in Paris and Germany.

“We’re seeing lots of business from people not paid in sterling who want to buy in the UK,” said Baker. “I’m doing more of this type of business than ever before.

“The feeling is that the UK is a good place to have your money, and London is a safe bet.”

Baker said while there was a lot of interest in houses with gardens, he was seeing a gradual shift towards flats, which fell out of favour during the height of the pandemic.

He added: “Buyers are seeing the potential for deals to be had because they are not as popular as they once were. And those who are buying to rent out aren’t as concerned about garden space.”

By Samantha Partington

Source: Mortgage Solutions

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Middle East investors begin to return to UK’s property market

Investors from the Middle East are beginning to return to the UK’s property market, according to the latest data compiled by global property consultancy Knight Frank.

The firm’s data highlights that 16 per cent of all sales to overseas buyers in the first three months of 2021 were to Middle Eastern buyers, up from less than 10 per cent in the second and third quarters of last year. This is the highest proportion of Middle Eastern interest since the outbreak of COVID-19 in the UK.

Despite early signs of a recovery, the firm says Middle Eastern investment is still some way off pre-COVID levels, yet it expects activity to tick up further as international travel restrictions ease.

The data highlights that buyers from the GCC are currently ranked third most prominent in the UK, only surpassed by buyers from Asia (18 per cent) and Europe (59 per cent).

“International demand for London property has been building over the last 12 months despite global travel restrictions,” said Tom Bill, head of UK residential research at Knight Frank. “It has led to frustration on the part of some prospective buyers, particularly against the backdrop of the UK’s successful vaccination programme. Once travel rules are relaxed, we expect normal service to resume, including London’s long-standing relationship with buyers from the Middle East.”

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Despite lower-than-normal levels of investment from GCC investors, Knight Frank’s Global Wealth Ambassador to the Middle East, who works closely with the region’s high net worth individuals and family offices, has completed almost £90m worth of sales since the UK went into lockdown.

Moreas Madani, Middle East Global Wealth Ambassador at Knight Frank, said, “There is a particularly high demand from GCC investors for best-in-class new build projects in and around Mayfair.

“We are seeing steady interest from the Middle East; however, the biggest challenge remains restrictions on international travel. As this eases, and post-Ramadan, we are expecting to see more activity from the region as pent-up demand is released.”

Lodha, the developer behind No.1 Grosvenor Square, the former US Embassy and the Canadian High Commission, is witnessing first-hand the uptick in demand from Middle Eastern buyers. No.1 Grosvenor Square offers 44 Grade I listed apartments, through Knight Frank (+44 20 7861 5461).

Gabriel York, Co-CEO of Lodha UK comments, “We have seen a steady increase in enquiries from prospective purchasers from the Middle East since the start of the new year, and we expect this to continue through the summer as London re-opens and international travel resumes. We are now meeting numerous GCC families and business people who may have previously stayed in a hotel suite when travelling to London but are now looking to acquire a permanent residence in the city.

“They are attracted to No. 1 Grosvenor Square by the prestige and grandeur of the building, the central Mayfair location, the quality of the amenities and the desire for exceptional services that are personalised for them. The unique automated parking system, known as the vault, has also been a particular draw for customers from the Middle East with special car collections who want a total security for their vehicles.

“Health and wellbeing are increasingly important factors in property decisions, and purchasers are seeking residences close to garden squares and parks with exceptional health facilities and easy access to health services. No 1 Grosvenor Square is located on London’s second-largest garden square and within walking distance to central London’s largest park, Hyde Park. The building contains its health and wellness centre, including 25m swimming pool, gym, pilates room, treatment and consultation rooms, and is supported by health advisers from a range of wellness and medical disciplines.”

Source: Times of Man

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Chinese investors – will there be a drop in buying after the stamp duty holiday?

The stamp duty holiday – which began in July last year and will continue in its current format until the end of June, before applying to lower-priced properties until September 30 2021 – triggered significant activity last year among Chinese residential buyers in the UK.

Such activity has continued through into this year, with Chinese buyers still having a major influence on some areas of the UK property market. In 2019, spending reached £7.7 billion in London alone, according to the Office of National Statistics.

And, despite the Covid-related restrictions on travel out of China for much of the last year, the stamp duty holiday has helped to keep demand and investment high.

But, according to Domenica Di Lieto – chief executive of Chinese planning and marketing consultancy, Emerging Communications – there remains the question of whether we are seeing the best of Chinese buying, or could it simply be the tip of the iceberg?

“There is no shortage of research highlighting the enormous personal investment wealth held by China’s successful middle class,” she said. “According to Tsangs Group, there are currently 2.3 million HNWIs in China, and more than 26,000 Ultra HNWIs with £25 million or more in investable finance.”

She added: “The Hurun Report states that 61% of HNWIs invest through international residential property. This is a similar finding to previous annual reports, and is mirrored by findings in research by Juwai, Asia’s largest real estate technology company. In addition, most UHNWIs and HNWIs intend to live overseas, with 37% intending to make an international home their primary residence.”

Previously, Di Lieto states, the US was the preferred destination for private property acquisition, but the UK – and London in particular – is now the primary choice ‘for several reasons’.

“The key attractions are a stable and well-regulated housing market that offers good returns, plus high yield from rent. These factors are accompanied by the weak pound, and relatively low stamp duty compared to other locations,” she explained.

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“In the case of UHNWIs alone, investable wealth amounts to £396.5 trillion. Given that the UK residential property market is the single most popular option for investment indicates that Chinese buying so far is potentially the beginning of much greater acquisition to follow.”

She believes that not only is the potential of Chinese buying significant now, but it will grow. “China is the only major economy that has got bigger during Covid, and is due to become the largest in the world by 2027. The major beneficiary of growth will be the Chinese middle class,” she said.

“The existing property buying demographic will acquire more income, but the actual numbers of HNWIs will also grow in size considerably within the next decade.”

Until now, Di Lieto says, it has primarily been those living in Tier 1 cities such as Shanghai and Beijing that have purchased in the UK. But China’s fastest economic growth is taking place in Tier 2, 3 and 4 cities, she argues, creating a new cohort of wealth.

“What’s more, they show every sign of sharing the same motivations to purchase UK property,” she added.

A key element of this is supporting the education of children studying abroad, which is the single biggest driver of residential buying interest for the Chinese.

According to Juwai research, some 83% of HNWIs intend to educate their children overseas. Di Lieto says that, as an international higher education destination, the UK is now the most popular, and increases its lead every year.

“The US trade war with China along with visa restrictions, has seen Chinese student enrolments in America plummet in favour of UK universities,” she said. “But other formerly popular countries for study have damaging disputes with China. Canada, New Zealand and Australia have worsening relations, which have seen student numbers diverted towards the UK. Within China’s border, the popular favour of study in Hong Kong has waned, and with it diversion to these shores.”

That said, Covid has inevitably had an impact on the numbers of new Chinese students in the UK. Last year, many yet to start their studies took a gap year at home in anticipation of the pandemic becoming more controlled.

“This has resulted in two years of normal Chinese student intake wanting to join UK universities in September this year, and the success of the UK’s vaccination programme is helping to drive demand,” Di Lieto said.

“There is another positive to higher education-driven property purchase. Traditionally, Chinese students learning abroad have come overwhelmingly from Tier 1 cities, but economic expansion outside these areas means new student catchment areas are growing at an increasing rate.”

Indicative of increased Chinese interest in university towns is Jawai’s annual report on the towns and cities prospective buyers find of most interest. Cambridge – world renowned for its university and status as a growing tech hub – has now become the UK’s fourth most popular location.

“Aside from HNWIs and the parents of students, there is another major group from China that buys UK property. Chinese alumni of the British higher education system often acquire housing as an investment,” Di Lieto explained.

“Having lived in the UK, they have a high degree of confidence as buyers, and it is not unusual for them to purchase sight unseen, particularly if there is recommendation from friends or family. This group is also growing in number and wealth.”

Another positive for developers and agents, according to Di Lieto, is that investors in China make their own financial decisions. According to a paper by BVI Finance, the Chinese wealthy middle classes manage their own investment finances, a behaviour driven by a culture of self-sufficiency. Individuals and families make their own decisions, resulting in clear pathways for selling.

“However, the majority of agents and developers do not pay enough attention to understanding Chinese buyers, or invest sufficiently in communicating with prospects,” Di Lieto claimed.

“In particular, there is a failure to create effective sales journeys, and crude use of Chinese social media. For example, unlike counterparts elsewhere, no UK agents or developers utilise the benefits of WeChat mini programmes, which is China’s most popular social media sales format. This presents a significant barrier to unlocking the real potential of the market.”

She concluded: “There is strong desire in China, and among Chinese expats, to buy residential property in the UK, but buyers have yet to be met on their terms.”

By Matthew Lane

Source: Property Investor Today

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London homes of the rich and famous draw Hong Kong buyers

Hongkongers are among the keenest buyers of homes that have been owned or rented by Hollywood actors, pop stars and tycoons, seeing them as a sound investment whose resale value is likely to be boosted by their celebrity associations, according to a London-based luxury property agency.

“Hong Kong and mainland Chinese buyers love buying prestigious homes, and if a mansion, penthouse or house in London has a famous or prestigious former owner or tenant, it does attract their attention,” said Mark Pollack, co-founding director of Aston Chase. His agency has completed more than £25 million (US$35 million) worth of sales to Hong Kong buyers, many of whom bought celebrity-owned or high-profile London homes.

A-list celebrities lend the most cachet to a property and can lift the asking price by up to 10 per cent. Their association can also generate worldwide exposure in the media.

Such luxury homes are typically already decked out with the most sought-after features by wealthy buyers, including total privacy, gymnasiums, spas, swimming pools and concierge services. But an association with a movie or pop star, especially one adored by the public, gives agents another selling point.

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Over the last five years there has been a shift in attitudes in sync with the popularity of social media that has paved the way for some celebrities to collaborate with agents instructed to market their properties, according to Aston Chase. The open manner in which the ownership of properties has to be registered both in the UK and overseas also means the rich and famous had become more relaxed about helping advertise their houses.
Aston Chase recently sold a Hong Kong buyer a top floor residence at the Corinthia Hotel, which has been used over the years for exclusive events and stays by guests including American music stars Jay-Z and Rihanna. The £10.75 million penthouse flat has a floor area of 3,703 square feet and is part of the Corinthia Residences, which connects directly to the hotel in the Whitehall area of London.

A newly refurbished three-bedroom duplex residence at Portland Place that was formerly the London residence of Sir Carl Meyer, chairman of De Beers diamonds and jewellers, was also sold to a Hong Kong family for £4.4 million, the agency said.

“We have had several inquiries from Hong Kong buyers for Eglon House,” said Howard Kayman, associate director at Aston Chase. “All of them have been families with several children, with the buyers wanting a large family house with plenty of bedroom suites, and also facilities, which Eglon House offers, where the head of the family can work from home and run their business.”
A penthouse in the prestigious One Hyde Park in Knightsbridge owned by Nick Candy is on the market with Knight Frank and Savills for £175 million. The 18,000 sq ft property with five bedrooms including the master suite is the flagship penthouse of the property tycoon.
It has a private spa and temperature-controlled wine room for 750 bottles.
“The Candy brand is recognised globally for its world-leading luxury interior design and unparalleled attention to detail,” Candy said in an emailed response to the Post. “This level of luxury and specification has always appealed to ultra-high net worth Hong Kong and Chinese buyers who want the very best.”

By Cheryl Arcibal

Source: SCMP

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Number of overseas landlords with UK properties hits five-year high

If the latest figures highlighting the number of overseas landlords owning property in the UK is anything to go by then Brexit hasn’t deterred investment in the UK property market.

According to the most recent data, the figure stands at a five-year high of 184,000 – marking an increase of 19% over five years, when there were 154,000 overseas landlords,

Residential property market experts, Ludlowthompson, suggest that many overseas investors have capitalised on the drop in the value of Sterling between the EU referendum and the Brexit deal to add to their portfolios. Favourable exchange rates meant that foreign buyers were able to get more for their money, opening the market up to a wider pool of investors.

Despite tax changes, including a 2% Stamp Duty surcharge that will increase costs for overseas investors, property in the UK will remain an attractive long-term investment prospect for investors from many overseas jurisdictions.

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The UK property market has traditionally been resilient in times of economic uncertainty and a structural shortage of properties has kept rental yields relatively strong.

In recent years there has been an increase in the number of Hong Kong buyers of UK property. This is expected to rise following the launch of the new visa for Hong Kong British National Overseas passport holders.

The reputation of schools and universities in the UK has also benefitted the property market. Many overseas landlords who have purchased property have done so to provide accommodation for their children who were studying in the UK.

Overseas landlords have been benefitting from the Stamp Duty holiday, which has enabled buyers to save as much as £15,000 on properties worth up to £500,000. The holiday is set to run until June 30th after which point Stamp Duty will be reintroduced on properties worth £250,000, and will apply to properties over the £125,000 threshold from September 30th. Whilst overseas landlords have benefited from the holiday, from April 1st they will be liable to pay a 2% Stamp Duty surcharge on property investments.

Stephen Ludlow, Chairman at ludlowthompson, comments: “Fears that Brexit might dampen the appeal of UK property amongst overseas investors have been unfounded, with the number of overseas landlords reaching a record high.”

“Many canny investors took advantage of the temporary drop in Sterling’s value to purchase properties in the UK and benefited from both an increase in property prices and a recovery in sterling.”

“Investments by overseas landlords into UK buy-to-let properties have ensured that there has been a steady stream of capital into that sector, which has kept the quality of rental stock far higher than would have been the case with these investors.”

Source: Property Reporter

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Chinese investment in UK assets estimated to be £135bn

Chinese investment in UK assets like businesses, infrastructure and property has reached an estimated £135bn – almost double what was previously thought.

About £44bn of this investment has come from state-owned firms, with many of the purchases happening over the past two years.

An investigation from the Sunday Times found that Chinese and Hong Kong investors own stakes in vital UK infrastructure providers like Thames Water and Heathrow Airport, along with £57bn worth of shares in blue chip FTSE100 firms.

The estimated £135bn value of Chinese ownership in the UK trumps the previous £71bn estimate by the Washington D.C.-based American Enterprise Institute.

Tory MP, and prominent China critic, told the Times: “This demonstrates that successive governments have been asleep on the watch. This evidence today shows how dangerously we are sailing towards Chinese control of key aspects of our business.

“China poses the single greatest strategic threat to the UK and the free world and we must make sure that we understand exactly how they set about essentially controlling key areas of economies, not only in the UK but also abroad.”

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The UK’s relationship with China has become increasingly frosty over the past year and a half, with foreign secretary Dominic Raab levelling sanctions on Beijing for its ethnic cleansing campaign against the country’s Uyghur Muslims and for its freedom of speech clampdown in Hong Kong.

Boris Johnson also moved to ban Chinese telecoms giant Huawei from helping build the UK’s 5G infrastructure based on fears that Beijing may use the network for espionage purposes – a charge Huawei denies.

However, the government’s integrated review of foreign and defence policy this year appeared to extend an olive branch to the Chinese government.

The review said the UK would “invest in enhanced China facing capabilities”, while adding that “open, trading economies like the UK will need to engage with China and remain open to Chinese trade and investment”.

Read more: UK sanctions Chinese officials over Uighur human rights abuses

China was also labelled as a “systemic challenge” in the review and not a threat to security, such a countries like Russia, Iran and North Korea.

Intelligence and Security committee chair, and Tory MP, Julian Lewis at the time criticised Johnson for displaying “the grasping naivety of the Cameron-Osborne years” when it came to China.

By Stefan Boscia

Source: City AM

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Overseas landlords set a new five-year record during the pandemic

An increase of 19% will now see the number of overseas landlords hit a five-year high of 184,000. Despite the implications of Brexit, the COVID-19 pandemic and recent tax changes preventing such moves from happening in the first place, the UK property market has thrived. And, these factors have not been a deterrent for foreign investors at all.

The UK has been a go-to destination for foreign investors for many years now. Those out of the 184,000 overseas landlords are potentially on track or have already experienced projected capital growth and favourable exchange rates due to their investments. Increased tax changes, such as the 2% stamp duty surcharge introduced to overseas investors at the start of this month, are trumped by the long-term prospects UK properties currently have.

The most noticeable increase has been seen from Hong Kong investors following the new British National Overseas (BNO) visa launched at the end of January. Locations such as London have seen a high level of interest from this group of foreign investors. At the same time, northern cities such as Liverpool and Manchester have also been popular due to the more affordable properties and living costs compared to the former.

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A Senior Director of Global Sales and Marketing, Cauvery Nanaiah, has commented that these overseas buyers transact in the Hong Kong Dollar and Chinese yuan due to the pound sterling being so low, therefore getting value for their money. “Interestingly now, the focus is moving away from zones 1 and 2, towards regeneration areas with better yields, such as Luton, Harlow and Hounslow,” she added.

The fact that overseas investors are continuing to invest within the UK property market is an extremely positive sign for the market’s future. The value of UK property is soaring even off the back of a global pandemic. The quality of life the UK offers is also seen as a bonus to overseas investors. The reputation of schools and universities here in the UK help to attract foreign investment and encourage overseas landlords to invest. Many decide to purchase buy-to-let properties, which will also help provide accommodation for their children studying in the UK.

The number of overseas property investors is expected to soar, as the UK government predicts at least 300,000 Hong Kongers will arrive in the next five years. Around 7,000 people from the former British colony have already been allowed to settle in the UK. These numbers do not consider the number of overseas investors from other countries either, which could see the 19% rise even higher than anticipated.

Investing in UK property has never been as popular for overseas landlords. The properties they purchase should also see them make capital growth due to the value of the sterling, which should only ever rise. Therefore, domestic investors should note these changing statistics and increased competitions, as they could miss out on capital growth post-pandemic. If you’re searching for your next property to invest in, read our blog on where tenants want to live as we enter the new ‘normal.’

Written by Nicholas Wallwork

Source: Property Forum

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Overseas Investors: Will UK property remain a long-term investment choice?

UK property has long been a ‘safe haven’ for overseas investors, with the market’s robust performance throughout the pandemic highlighting its resilience as an investment asset.

Driven by the Stamp Duty holiday, this generous discount has not only benefited UK buyers but acted as an additional incentive for overseas investors.

With this in mind, it is no surprise that the number of overseas landlords is at a five year high, now surpassing 184,000. This climbing amount of investment is a significant driver behind UK property prices, which have surpassed £300,000 for the first time in history.

However, all good things must come to an end, and with the Stamp Duty holiday concluding in September, will the recent surcharge change perspectives amongst overseas investors?

What is the Surcharge?

Since April 2016, on top of standard Stamp Duty Land Tax (SDLT), investors have been required to pay a further flat 3% Stamp Duty on the full value of all additional properties worth more than £40,000.

However, the UK government has also implemented a 2% surcharge for overseas investors. This surcharge will be in addition to the current Stamp Duty rates and will be applicable for the majority of international buyers, including both overseas investors and international companies. The government has been clear as to who will be exempt from the surcharge, predominantly those involved in Real Estate Investment Trusts and other collective investment vehicles.

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The surcharge is largely being introduced in response to UK property’s upward trajectory for the past 20 years, the majority of which has been underpinned by international investment. This level of growth – bar momentary dips – has made it increasingly challenging for first-time buyers in the UK to get on the property ladder, hence the surcharge.

What does this mean for overseas investors?

When this additional surcharge was announced in 2016, many experts anticipated a surge in overseas buyers investing in UK Buy-to-Let property, followed by a sharp fall. While international investment remained strong in the years leading up to 2020, the additional uncertainty surrounding Brexit and the pandemic was almost guaranteed to discourage overseas investors.

However, the Stamp Duty Holiday has not only propelled the UK property market but also dissolved the majority of concerns surrounding Brexit. With the relatively positive results we’re seeing across post-Brexit Britain, combined with the continued growth arising from the Stamp Duty Holiday, the potential growth of UK property could significantly outweigh the overseas Stamp Duty surcharge.

But as government incentives end and the full effects of the Stamp Duty surcharge are felt in full effect, will UK property remain a long-term investment choice for overseas investors?

Andy Foote, director at SevenCapital, comments: “Although we’ve known about the surcharge since 2016, the whirlwind of 2020 overshadowed it to some extent. But now it is in full swing, investing in UK property will inevitably be more expensive for non-UK investors.

“Considering the standard rate, combined with the surcharge, overseas investors could face extra payments they hadn’t considered within their property investment planning.

“That said, the performance of the property market over the past year, combined with its forecasted growth, still positions the UK as a high-performing, affordable property hotspot in comparison to alternative countries.

“Not only has the average property price surpassed £300,000, but rental yields are creeping up across the country. While the average UK rental yield currently sits at 3.53%, emerging areas, such as Bracknell, are reaching 4.80% for two-bed apartments.

“Offering a passive income of up to £1,103 a month and £13,236 annually, it’s unlikely that this Stamp Duty surcharge will deter overseas investors, with the potential for 14.5% growth in prices by 2025 only offering more incentive to invest in UK property.”

Between Brexit, a global pandemic and extensive tax changes, the UK property industry has seen it all. The market’s resilience alone offers investors the reassurance that property is a sturdy investment, and with this growth forecast to continue, the Stamp Duty surcharge is seemingly a small price to pay for a potentially lucrative asset.

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UK property remains attractive investment for overseas investors

Despite economic uncertainty, overseas investors continue to flock to UK property for investment. In recent years, the property market has performed particularly strongly.

The number of overseas landlords owning property in the UK has reached a five-year high. There are currently 184,000 overseas landlords. This is a 19% rise over the past five years, according to data from estate agent ludlowthompson.

Despite tax changes in the buy-to-let sector, the COVID-19 pandemic and Brexit, UK property has remained an appealing long-term investment for many overseas investors. And this is expected to continue to be the case in the coming years.

A rise in demand from Hong Kong investors
There has been a particular increase in the number of property investors from Hong Kong. This is expected to increase further with the launch of the new visa for BNO passport holders, which opened for application on 31st January.

London has long been the traditional location for Hong Kong investors. There has continued to be strong demand in the capital. And there has also been a rise in Hong Kong investors and buyers looking to the north-west of England, especially Liverpool and Manchester. Cheaper house prices and strong demand are big draws for this region of the UK.

Favourable exchange rates
The value of the pound dropped since the EU referendum. Some overseas investors took the opportunity to add to their property investment portfolio. The Brexit uncertainty, which was followed by the COVID-19 pandemic, has kept the value of the sterling low.

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With recent favourable exchange rates, foreign buyers could get more for their money. This opened up the sector to a wider pool of investors. At the beginning of the year, overseas investors even ranked the UK as the best residential property investment hotspot for 2021.

Stephen Ludlow, chairman at ludlowthompson, says: “Fears that Brexit might dampen the appeal of UK property amongst overseas investors have been unfounded, with the number of overseas landlords reaching a record high.

“Many canny investors took advantage of the temporary drop in Sterling’s value to purchase properties in the UK and benefited from both an increase in property prices and a recovery in sterling.”

Stamp duty changes
Overseas investors have also been benefiting from the stamp duty holiday. The tax holiday has allowed buyers to save up to £15,000 on properties worth up to £500,000. The holiday is in place until 30th June. After that, the nil-rate band will be in place for properties worth up to £250,000 until 30th September.

Second homes and property investment still incur a 3% stamp duty rate. And an additional 2% stamp duty surcharge came into place for overseas buyers and investors on 1st April 2021. While many overseas landlords looked to complete on property investment purchases prior to this date, the additional surcharge is unlikely to be a deterrent as there are numerous factors making UK property investment appealing.

By Kaylene Isherwood

Source: Buy Association

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Overseas Property Investors Still Buying UK Property

Brexit has not put overseas property investors off investing in UK property, London property agent ludlowthompson has reported.

In fact the number of overseas landlords owning UK property has hit a five-year high, said the firm. At 184,000, the number represents a 19 per cent increase over five years.

Many overseas investors made the most of the fall in the value of the pound between the UK’s EU membership referendum and confirmation of a Brexit agreement. ‘Favourable exchange rates meant that foreign buyers were able to get more for their money, opening the market up to a wider pool of investors’, said ludlowthompson.

Despite tax changes, including a 2 per cent stamp duty surcharge, UK property will remain an attractive long-term investment prospect for overseas investors, it believes.

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In recent years there has been an increase in the number of Hong Kong buyers of UK property. This is expected to rise following the launch of the new visa for Hong Kong British National Overseas passport holders, said the firm.

‘Fears that Brexit might dampen the appeal of UK property amongst overseas investors have been unfounded, with the number of overseas landlords reaching a record high’, said ludlowthompson chairman Stephen Ludlow.

‘Investments by overseas landlords into UK buy-to-let properties has ensured that there has been a steady stream of capital into that sector, which has kept the quality of rental stock far higher than would have been the case with these investors’.

Source: Landlord Knowledge

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