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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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London should be the first to welcome those from Hong Kong

On 31st January, millions of Hong Kong residents were offered a new route to move to Britain. Already 5,000 have signed up for a visa that allows them to settle in the UK, with some estimating as many as two million may eventually move here. For London’s property market, which has had a tough few years between Brexit, stamp duty changes and covid-19, Hongkongers could provide a welcome shot in the arm.

They have already been making their mark. According to immigration advisers Astons, citizens of the Asian city-state invested over £300m in London housing in the first nine months of 2020. Meanwhile, recent research by Hamptons International revealed buyers from Hong Kong were behind almost ten percent of all sales last year in the capital’s wealthiest boroughs.

Many Hongkonger families had already bought investment properties in London before the Chinese government’s crackdown, while Hong Kong-headquartered firms such as C C Land and Far East Consortium have been major players in London real estate for years now.

C C Land acquired the Cheesegrater for £1.15bn in 2017 – the single largest purchase by a Chinese investment company in British property – and is one of the joint venture partners behind the £1bn revamp of the former Whiteleys department store.

The arrival of thousands of Hongkongers in the UK capital will likely drive further activity. Indeed, the chief executive of Far East Consortium told Bloomberg last year the developer hoped to capitalise on the potential exodus.

Given anxieties about immigration undeniably contributed to the Brexit vote, the government’s decision to open the doors to potentially millions of Hongkongers may seem surprising.

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But unlike in the Nineties, when there was firm opposition to giving Hongkongers a route to UK residency, there is now clear support across all party lines to give residents of this former British colony a chance to start a new life here.

This shouldn’t be too surprising. Attitudes have undeniably changed for the better over the past three decades. Hongkongers are also well educated, share our language and have a deep understanding of British institutions and traditions.

They will of course need some assistance settling in. Jobs and housing will be the key areas they need most help in according to community group Hong Kongers in Britain.

One obvious action the government could take would be to exempt Hongkongers from the incoming additional stamp duty on overseas buyers.

The levy should be abolished completely given international investors are a crucial source of development finance, especially in the major cities where homes are most needed. But at the very least Hongkongers should be excluded from paying.

The Greater London Authority and Mayor, working with London boroughs, should also be proactive in welcoming and supporting Hongkongers. This is all the more pressing given some 700,000 non-UK born workers left the capital during the pandemic. While many will no doubt return, London should be making sure it is the number one destination for those leaving the city-state.

Source: Property Wire

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BNO visa sparks rise in UK property investment from overseas

Investment in UK property by overseas landlords has hit a five-year high, according to property management company, ludlowthompson. Data shows that 184,000 overseas nationals own property in Britain, representing a 19% increase over the past five years.

The property management company stated that the rise in the number of foreign buyers shows that Brexit has not deterred overseas investors looking to buy property in Britain. Ludlowthompson said that many overseas investors have capitalised on the drop in value of the pound sterling between the EU referendum and Brexit deal.

Foreign investors have reportedly been able to get more for their money because of favourable exchange rates, which has opened up the market to a wider pool of investors.

BNO visa launch plays part

Ludlowthompson’s research shows that in recent years, there has been a surge in the number of investors from Hong Kong. The property management company has attributed this to the launch of the new BNO visa.

There has been a steady rise in the number of overseas nationals securing UK investor visas. Many overseas landlords have purchased property in order to provide accommodation for their children who have secured a study visa to attend a UK university.

Investment in UK property in the current climate has also been made more appealing by the stamp duty holiday, which has enabled many overseas investors to save more than £15,000 on properties worth up to £500,000.

The stamp duty holiday currently runs until 30 June, when it will then be reintroduced on properties worth £250,000, before becoming applicable to properties above the £125,000 threshold from 30 September, 2021.

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Brexit fears unfounded

Chairman of ludlowthompson, Stephen Ludlow, said: “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,” Ludlow added.

Meanwhile, the launch of the UK BNO visa on 31 January saw interest in UK properties soar among nationals from Hong Kong. London in particular has seen a high volume of interest, while cities such as Liverpool and Manchester have seen strong interest as well because of more affordable properties and living costs compared to the capital.

The BNO visa provides a pathway to UK citizenship, which has heightened interest among Hong Kong nationals to secure property in Britain.

BNO visa applicants

Property experts are anticipating a continued rise in the number of overseas investors looking to purchase property in the UK, especially from Hong Kong.

The UK government has been unable to put an exact figure on the number of people set to arrive in Britain from Hong Kong. However, they are predicting that at least 300,000 will arrive over the net five years. 7,000 people from the former British territory have already been allowed to settle in the UK.

Written by: Daniel Waldron

Source: Work Permit

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London will remain “extremely attractive” despite 2% SDLT surcharge

Non-UK residents are now required to pay a 2% Stamp Duty Land Tax (SDLT) surcharge, but demand in Central London is unlikely to dampen.

UK resident companies that are controlled by non-UK residents may be required to pay, and the surcharge applies to freehold and leasehold purchases and on rents on the grant of a new lease.

The implementation will also see buyers who intend to live in the property required to pay the surcharge.

Under the new guidelines, individual buyers can have the surcharge refunded if they are in the UK for at least 183 days during any continuous 365-day period within two years referenced by the date of transaction.

Harry Buchanan said: “Despite the introduction of the additional stamp duty surcharge for foreign buyers today, we expect prime central London to remain an extremely attractive prospect for international buyers.

“In fact, we anticipate many more overseas buyers will return to the market once international travel restrictions are lifted.

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“We therefore expect demand to remain strong going forward, especially as the UK continues to roll out one of the world’s fastest vaccination programmes, which will boost economic activity in the coming months.

“We are already starting to see pent up demand from overseas buyers starting to build. Over the past two months, numbers of buyers visiting our website from the UAE have increased by 31%, while website searches from Hong Kong have gone up 33%.

“In particular, more buyers from Hong Kong are getting in touch following the UK’s offer of an easier path to citizenship for Hongkongers with British National (Overseas) passports.

“These buyers are specifically looking to become owner occupiers, and are particularly keen to be close to good schooling.

“The increasing demand we are seeing gives us a strong indication that interest in prime central London will continue to be high, especially for turn key properties that can double up as a lock and leave which we know tend to be most sought after by foreign buyers, as well as properties close to transport hubs.”

By Jake Carter

Source: Mortgage Introducer

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International Demand For UK Property Expected to Surge This Summer

Industry experts are predicting that overseas buyers will be rushing to invest in UK property in summer 2021, once international restrictions are eased.

Summary:

  • International buyers have still got a strong appetite for investment properties in the UK. Buyers from the Middle East and Hong Kong are leading the pack.
  • UK property market remains buoyant despite the COVID-19 pandemic, demonstrating the resilience of this historically strong market.
  • Areas outside of London are being touted as the best investment and cities in the North and Midlands like Manchester, Birmingham and Leeds are attracting keen interest.

International travel restrictions look set to be eased this summer, with overseas buyers expected to be waiting eagerly to be able to scout out new UK property investment opportunities.

The British property market has emerged from the gloom of COVID-19 intact and as strong as ever. While demand slowed considerably at the start of the pandemic, pent-up demand was unleashed in the summer of 2020 and another surge is anticipated in summer 2021.

Every region in the UK recorded an increase in house prices in 2020 and estate agent Savills is predicting that house prices will rise by another 4% this year. Lucian Cook of Savills commented that: “By extending both the stamp duty holiday and the furlough scheme in last week’s Budget, the Chancellor has significantly reduced the downside risks in the mid-year, while a recovering economy should support price growth towards the year end.”

Buyers from overseas – especially the Middle East and Hong Kong – are particularly keen to capitalise on the strength of the market. While properties in London were previously highly sought-after, many of these buyers are now looking to seek better investments in regional cities.

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The Stamp Duty holiday gave many of these buyers a push in 2020, but global optimism is set to cause another surge in Middle Eastern and Hong Kong purchase rates in 2021 as well.

Investment property in the North West and Midlands is being highlighted as having much stronger rental yields and better opportunities for long-term capital appreciation.

Middle Eastern property buyers have long been leading the way in the race to get on the UK property ladder, but there has recently been an influx of buyers from Hong Kong as well. This is due to the new path to UK citizenship being granted to them in 2020.

Where are overseas investors looking?

Developers and estate agents across the North West and Midlands are reporting strong interest from overseas buyers, and this trend looks only set to increase in the summer.

Manchester, Leeds and Birmingham are all featuring as some of the most desirable locations for investment-savvy overseas property buyers.

Global real estate agent Jones Lang LaSalle forecast in January that Manchester will see the highest sales price growth (17.1%) and rental price growth (16.5%) in the UK over the next five years.

Manchester has been known as an investment hotspot for some years, but the city continues to grow – both in terms of industry and population – and is highly desirable by both young professionals and families alike.

The bustling city of Birmingham also continues to be a strong contender on the international property investment scene. In global real estate services company JLL’s recent residential housing report, Birmingham was reported to be the ‘standout performer’. House prices and the rental market are both expected to perform strongly over the next few years due to business and transport investment in the city.

Source: Select Property

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The number of overseas landlords reaches a five year high

The number of overseas landlords owning property in the UK has hit a five-year high of 184,000, marking an increase of 19% over five years.

Ludlowthompson says that the rise in the number of overseas landlords shows that Brexit has not been a deterrent for those looking to invest in UK property, as many overseas investors have capitalised on the drop in the value of pound 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, says the estate agent.

Ludlowthompson adds that despite tax changes, property in the UK will remain an attractive long-term investment prospect for investors from many overseas jurisdictions.

Research shows that 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. Ludlowthompson says that many overseas landlords who have purchased property have done so to provide accommodation for their children who were studying in the UK.

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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 30 June after which point stamp duty will be reintroduced on properties worth £250,000, and will apply to properties over the £125,000 threshold from 30 September. From 1 April, overseas landlords will be liable to pay a 2% stamp duty surcharge on property investments.

Stephen Ludlow, chairman at ludlowthompson, said: “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 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: Property Wire

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Hull investment on the up as overseas buyers snap up Anlaby Road property

A Chinese businessman has snapped up a high-end residential complex in Hull in the latest example of foreign investment in the city.

Anchor House has been sold by Hull property company, Westfield Homebuyers, the multi-million-pound deal being handled by city legal firm, James Legal.

Westfield founder Mike Clayton purchased the iconic property, in Anlaby Road, from a housing association at auction five years ago and spent the following year on a refurbishment that transformed it into a high-quality rental complex that is now home to a range of young professionals, including medical staff working at Hull Royal Infirmary and visitors to some of Hull’s major industrial employers.

Mike said: “It had been used to house tenants with a variety of issues, and so was built from concrete and steel to withstand vandalism, arson and other issues, giving it a very institutional feel.

“We took it back to brick inside and created a suite of high-end flats and studio apartments, as well as putting in communal cooking, garden and barbecuing areas, and even a gym and sauna.”

It was Mike’s long-term passion for property that inspired the qualified chartered surveyor to take on what proved to be a tough but rewarding project.

Anchor House is now at the epicentre of Hull’s ongoing regeneration, with MyPad Accommodation acting as management agent for the building, but Mike, who is entering semi-retirement, has now sold the complex almost fully let and was not surprised that it was an overseas buyer.

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“Hull represents a really good investment compared to traditional hubs like London, Manchester or Leeds, because property remains relatively good value here, while still returning solid rental yields, particularly with interest rates on traditional savings still historically low,” he said.

Dealing with an international purchase in the midst of a global pandemic was no mean feat, however, the transaction taking longer than the anticipated three weeks – the deal eventually went through after about six months.

Simon Young, managing director of James Legal, said: “We take great pride in supporting major projects like this which are key to the city’s infrastructure and ongoing development.

“It’s the latest example of how our team regularly pull out every stop to get transactions over the line for our clients, even in the most challenging circumstances – in this case, in the midst of a historic global pandemic.”

Danny Gough, managing director of MyPad, said: “This deal was a fantastic development for all the companies involved, and indeed for Hull as a city.

“MyPad will continue to manage Anchor House for this overseas buyer, who I understand hopes this will be the first of many similar investments in this locality.

“And he’s not the only one, we’re seeing many similar enquiries, week-on-week, from foreign investors who like the look of what Hull and surrounding area has to offer.”

By Deborah Hall

Source: Hull Live

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