property
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A buyer’s market for UK with demand from overseas purchasers

One Global Group predicts that the United Kingdom (UK) will experience a return to the buyer’s market in the coming year and that demand from Malaysia and other international markets will increase even more.

The company is optimistic about 2023 since the year’s market circumstances would be perfect for foreign purchasers wishing to buy a home in the UK.

“We’re seeing buyers from across Asia purchasing in UK locations that are offering the best value for money,” said Eli McGeever, director of research and technology innovation at One Global Labs.

“What ties these investors together is that they’re all purchasing for one of these four reasons, which is as a place for somewhere for their children to live while studying, as wealth preservation, to diversify their assets, or they are immigrating and need a home to live in,” he said.

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According to McGeever, although borrowing rates are higher than they were earlier this year, purchasers have a lot more options because there are still currency gains to be had and rising house inventory levels.

“That being said, buyers in Hong Kong have a broad interest, due to the diversity of buyers, from seasoned investors to BNO buyers looking to purchase a home to live in. There are many more types of properties demanded compared to a few years ago. These can range from apartments in inner London, to detached/semi-detached homes in the Home Counties.

“Hong Kongers have also been strong buyers in regional powerhouses, such as Manchester and Birmingham. Whereas buyers in Singapore and Malaysia are still more interested in London,” he said.

McGeever said there are five key areas that are going to make 2023 a buyer’s market and the ideal time for investors in Asia looking to purchase a home in the UK.

“These are price corrections in some markets, more home inventory, strong rental price growth, favourable exchange rates, and, mortgage rates lowering,” he said.

McGeever said that following the unsustainable real estate buying frenzy of the previous two years, sales volumes have returned to pre-pandemic levels.

Although costs are still rising in much of the UK on an annual basis, he said that they have started to decline in select markets.

“What’s likely to happen next year is that prices will correct by a couple of percentage points in some markets while staying pretty level or rising in others. Each city has its markets. For example, areas in London such as Harrow, Hounslow, and Newham will likely outperform the market, as will areas in Manchester, such as its city centre,” he said.

McGeever said that the housing stock is finally increasing, which will bring the real estate market some much-needed equilibrium.

He said that a lack of available housing has contributed to the dramatic price growth that has occurred since the Covid epidemic began.

According to him, building more homes will assist to slow the price increase.

The housing stock has increased by 40 per cent over the last year, according to Zoopla. But inventories are still 19 per cent below levels from 2017 to 2019.

According to McGeever, rental costs have increased quickly in the UK over the past year, and he doesn’t think this trend will slow down in 2023.

He said the high rental costs will probably encourage more people to look into purchasing a home, particularly first-time purchasers who would prefer to increase their equity in a brand-new residence.

“Investors who are looking for a buy-to-let property should not be concerned about demand weakening anytime soon. We expect the Pound Sterling to remain below rates seen only a year ago. This provides savings over any expected interest rate rise. However, One Global Group expects the Pound Sterling to strengthen for 2023 so early movers will benefit,” he said.

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Pent-up demand in off-plan projects

McGeever said that interest in off-plan projects has increased.

Buying off the beaten path enables purchasers who need financing to secure a mortgage close to the project’s completion date, he said.

He said this is a smart choice for people who anticipate that the interest rate will drop in 12, 24, or 36 months.

“Property developers are also currently offering more competitive pricing and lower deposits. This trend is expected to continue in the year to come,” he said.

According to him, notable projects in the UK with strong buying interest from overseas buyers include Graphite Square (Vauxhall, London), Fulton & Fifth (Wembley, London), and One Victoria (Victoria District, Manchester).

Graphite Square is a residential development by Third.i Group in London’s Vauxhall.

“The residences are just a short distance from the River Thames, the West End, Battersea Park, and Chelsea, so residents are never too far away from your next adventure in the capital. Prices start from £735,000 in the loft-style residences akin to what you might find in New York City’s Manhattan,” he said.

Fulton & Fifth, the newest development from Regal London is an upscale, “live-work-play” Wembley Park project comprising five apartment blocks set along Wealdstone Brook that will hold more than 800 homes on completion in early 2025. Prices start from £440,000.

One Victoria is a development by One Heritage Group PLC. Set over two blocks, it fronts Great Ducie Street. One East is a 14-storey building with 84 apartments while One West is 10 storeys high with 45 apartments, with prices starting from £199,000.

By Kathy B

Source: New Straits Times

overseas
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Overseas buyers will help avert a property market crash – claim 

A property tax consultant has hit back at suggestions of a housing market crash, suggesting that overseas investors will help sustain growth.

David Hannah, group chairman at Cornerstone Tax, has predicted that price growth will slow but said he is confident that it won’t turn negative.

It comes as a survey of 2,000 people by the firm found 55% were not deterred from purchasing property in 2023 – compared with 45% who said they would halt proceedings.

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Hannah said the 55% who will follow through with purchases in 2023 will most likely be buyers who are less dependable on interest rates.

Foreign investors will also seek to take advantage of the fall in the price of sterling, essentially, making the UK housing market 10% cheaper, he said.

He added that the 45% that will hold off on purchasing will be most likely first-time buyers, who now cannot afford the inflated mortgage payments.

Hannah said: “In early 2023 we will see slow demand. Only those people that are forced to sell will see a small fall in prices, however, over the whole of 2023, I expect to see low to mid to single-digit growth over the UK property market- between 5-8%.

“Despite the negative headlines we have been seeing, there is an underlying pressure on the market and that is leading to upward pressure on prices.

“We now have a growing number of people that want to move to the UK.

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“The first is the overseas investor who regards UK property as a safe haven for their money because the country they principally live in is not economically or politically safe.“The second are those who want to become second homeowners. The third and final group is those who want to leave their country of birth and are in need of a home.”

He suggests all of these factors over the course of the next 12 months will support the market, adding: “There will be no crash and no 10-20% fall in property prices that we saw in the noughties. The UK property market has tended to be more stable than any other global market in property.”

By Marc Shoffman

Source: Estate Agent Today

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Overseas buyers are flocking to London due to dollar strength, says agent

Carter Jonas predicts that 2023 will be an exceptional year for the prime central London (PCL) market following a recent spike in the number of cash buyers registering to purchase property in the heart of the capital.

Most recently, the Marylebone and Mayfair office has seen all cash buyers, many of whom are dollar buyers utilising the good exchange rates to purchase in prime central London, Next year is expected to continue on this trajectory, the estate agency says.

Carter Jonas predicts that the prime central London property market is set to out-perform the rest of London – and the country – in the coming months as overseas Dollar buyers from the US, Middle East and Asia flocking to the Capital to take advantage of the weak pound.

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Samuel Richardson, head of sales at Carter Jonas in Marylebone and Mayfair, commented: “We are anticipating that 2023 will be a very good year for the prime London property market. At the end of September this year, UK property was 25% less expensive for these buyers than in June 2021 and this is a trend we expect to continue. 80% of those that purchased via our Marylebone office in prime central London in the last quarter of 2022 have been from overseas. 50% have been Dollar buyers, the majority from America, followed by those from the Middle East and Singapore. Interestingly, 90% of American buyers were Californian.

“The major prime central London boroughs will remain desirable investment locations next year. Mayfair, Marylebone, Kensington and Chelsea are set to outperform all London markets as these buyers are purchasing in cash for purely investment purposes.

“Areas such as southwest London will likely be more heavily impacted, as those who bought there in recent years will be affected by the rising interest rates. This could see a drop in property values, as many people may sell up.”

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Richardson added: “I am almost certain that prime central London will outperform all other London areas in 2023. Despite there still being high demand and lack of supply, the soaring rental market will see the return of the investor as they take advantage of better rental yields. Savvy investors are also taking advantage of discounts from developers who are selling remaining units in new build developments and are happy to discount to cash buyers.

“Buyer demographics are varied from international and domestic professionals buying pied-a-terres in convenient, high traffic areas, to those purchasing short-term investments or properties for children whilst studying in London. We’re also seeing many families looking for a more permanent and long-term abode. These buyers are spending anywhere from £800,000 to upwards of £70m.

“If the dollar remains strong, I believe that prime central London will outperform the rest of London next year. The reason for this is due to high demand and a soaring rental market which will appeal to investors taking advantage of the good exchange rates.”

By Marc Da Silva

Source: Property Industry Eye

UK house prices
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Hong Kong Buyers Rushing to Buy UK Property

There are increasing numbers of Hong Kong residents who are looking to buy UK property. This is largely as a result of the evolving political situation in Hong Kong. Many Hong Kongers seeking UK property are taking advantage of the UK’s visa scheme for BNO passport holders, which was introduced in 2021. The visa programme provides a fast-track to British citizenship and was announced as a reaction to Beijing’s newly imposed national security laws which were seen to breach the 1984 Sino-British declaration which guaranteed certain freedoms to Hong Kong citizens for 50 years.

Between June 2021 and 2022 alone, Hong Kong has seen 121,500 people leave, with many of these taking the UK government up on its offer of fast-tracked British citizenship. In fact, the UK government has received 140,500 applications already.

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Hong Kong Buyers Looking to the UK
‘The UK has been a popular location for Hong Kong investors for a while. This is because it’s extremely affordable for most Hong Kong buyers compared to their expensive domestic market. The exchange rate from Hong Kong dollars to British Sterling also makes this a favourable purchase, especially given the current state of the Great British Pound. Strong rental yields and capital growth offered by UK property have also served to compound the attractive nature of UK property for Hong Kong buyers. But with so many Hong Kong residents looking to move to the UK, at least on a temporary basis, the demand for UK property from Hong Kong has grown even more’ says Stuart Marshall of Liquid Expat Mortgages.

‘We’ve seen a huge increase in enquiries from Hong Kong. But there are a number of common issues that Hong Kong buyers encounter. One of the most common early hurdles that Hong Kong buyers come across is that they are trying to use a high street lender. Such lenders are usually not equipped to properly serve a borrower from Hong Kong. A specialist mortgage broker, on the other hand, will have the infrastructure to put Hong Kong borrowers in touch with specialist lenders who have foreign national – and, in some cases, Hong Kong – specific deals.’

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Mortgage Deals Available for Hong Kong Buyers
A positive for Hong Kong investors in the UK is that, because of the demand at the moment, lenders are creating deals specifically for Hong Kong investors to satisfy the need for specialised products in the marketplace. ‘Lenders have been working with brokers to understand the specific needs of Hong Kong borrowers and work on crafting products that meet these needs. These products are available for a wide variety of uses on both residential and buy-to-let properties, new purchases and re-mortgages.’

Source: EIN News

Overseas property buyers
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Overseas buyers look to snap up London property as weak pound takes demand to ‘new levels’

Demand in London property from foreign investors is at “new levels” as they rush to make the most of the weaker pound.

The pound steadied in early trading in Asian markets on Tuesday, recovering ground slightly from the record low of 1.0327 against the dollar on Monday morning.

Sterling was standing at around $1.08 early on Tuesday but this is still significantly lower than before chancellor Kwasi Kwarteng’s mini-Budget, which sent the currency spiralling last Friday.

One London estate agent, Chestertons, has said that the dip in the value of the pound has driven interest from overseas buyers, who can now get more with their dollars.

“London already attracted overseas buyers back to its property market since the easing of travel restrictions but the weaker pound is taking demand from foreign investors to new levels,” Matthew Thompson, head of sales at Chestertons, said.

“Bearing in mind the dollar’s beneficial exchange rate against the pound, our branches have registered a particular boost in buyer enquiries from US citizens or residents of country’s where the dollar is a primary currency.”

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He continued: “To maximise the saving that can be had due to current exchange rates, buyers are especially drawn to some of London’s priciest neighbourhoods such as Knightsbridge, Mayfair and South Kensington.

“Only 6 months ago, a property that is on the market for £4million, would have cost around $5.23million. At the current exchange rate, the same property costs around $4.32million which is a saving of almost $1million.”

Rory Penn, head of London sales at Knight Frank, said that there has been “a pick up from international buyers who see a buying opportunity in London.”

“US buyers are either looking for best-in-class turnkey residential development or family houses and apartments,” he said, “particularly lateral space with high ceilings and period features.”

Arthur Lintell, who works in Knight Frank’s Notting Hill office, said that the North London residential area had seen particular interest from US buyers.

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“Favoured amongst Americans, Notting Hill has seen a recent surge in interest from US or dollar pegged buyers all keen to take advantage of the recent buying window,” he said.

“One in particular, an ex-Notting Hill local who relocated to New York 15 years ago, is now returning, as the opportunity is too good not to miss as their children start Notting Hill Prep next year. In their words: ‘The timing could not be better for us right now’.”

Naeem Aslam, chief market analyst at AvaTrade, said: “Given the weakness of the British pound, we may see foreign investors buying property in the UK as the currency has depreciated that much. For many, this could be a once in a lifetime opportunity.”

In an attempt to steady the markets on Monday, the Bank of England said that it “will not hesitate” to raise interest rates. However the pound fell after the joint statements from the Bank and its governor Andrew Bailey amid concerns that they had ruled out an emergency rise in rates.

The next interest rate decision is scheduled for 3 November.

Following the fall in the pound, some mortgage deals have been withdrawn by banks and building societies. Virgin Money and Skipton Building Society halted offers for new clients and Halifax said it would stop mortgages with product fees.

By Holly Bancroft

Source: The Independent

overseas
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Pound’s weakness could boost overseas investment in ‘resilient’ Scots property market

Sterling’s weakness could boost overseas investment in a “resilient” Scottish commercial property market, industry experts believe.

Property consultancy Knight Frank found that investment volumes in commercial property north of the Border rose by 37 per cent during the first nine months of 2022 compared to the same period last year, increasing to £1.46 billion from £1.06bn.

Offices were the most popular asset type, accounting for just over one-third of total investment volumes. Investment in industrial property almost doubled, from £157 million to £300m, as interest levels in the sector continued to increase following the pandemic.

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The research found that overseas investors remain the most active buyers of Scottish commercial property, accounting for 53 per cent of investment volumes. UK property companies increased their investment levels from £312m last year to £518m in the latest nine-month period.

Investment volumes in Aberdeen more than doubled from just over £54m in the first nine months of 2021 to £116.9m, buoyed by the sale of two retail parks. Edinburgh saw investment volumes increase 24 per cent to £415m, while Glasgow increased by 6 per cent to £377m.

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Alasdair Steele, head of Scotland commercial at Knight Frank Scotland, said: “There has been a great deal of uncertainty this year, starting with the complications of the ongoing pandemic, the conflict in Ukraine, and rising inflation and interest rates, but Scotland’s commercial property market has continued to fare well. This is particularly true for assets that are in high demand, namely prime offices and industrials – but alternatives, particularly hotels, are increasing in popularity.

“The summer period was relatively quiet after a flurry of deals were completed in the lead up to June. However, as we move into the final quarter, there remains a significant amount of dry powder waiting to invest and commercial property is traditionally seen as offering a good hedge against inflation – particularly for overseas investors, with the pound’s current weakness. We could see them take an even more active interest in the market in the remainder of 2022 and into next year.”

He added: “We anticipate a busy end to a challenging year, provided the macro-economic situation does not change materially and the right stock is made available.”

By Scott Reid

Source: The Scotsman

UK house prices
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London rental properties letting within minutes

One lettings agency in London says that tenant demand is so great in the capital for rental properties that many homes are being let within minutes of becoming available.

Benham and Reeves point to demand created by the return of professionals and international students, along with the growing shortage of available properties to rent, for creating a ‘challenging market’.

Tenant enquiry levels have continued to increase over the summer, across the firm’s 19 branches.

They say this is the ‘Most competitive London rental market that we have ever known’.

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Many branches have had almost no stock
In addition, tenants are finding that many branches have had almost no stock available, at best one or two apartments available to rent.

In a market update, the agent says: “Many properties are renting within hours – and some within minutes – as applicants immediately make an enquiry as soon as a property goes live on our website.

“This is swiftly followed by a full asking rent offer and once agreed, a holding deposit – so anxious are they to secure a property.

“This of course is great news for buy-to-let investors who, in many parts of the capital, are seeing their rental properties let immediately with voids at an absolute minimum. Sometimes just a day or two.”

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London is now a ‘landlord’s market’
The update also makes clear that the imbalance between supply and demand means that London is now a ‘landlord’s market’ with property investors expanding their property portfolios.

And rents are rising to pre-pandemic levels – some are now 10% higher.

Investors from overseas are also finding that the weakness of sterling makes London property considerably more affordable, while the shortage of rental properties means demand is the highest that the agent ‘has ever seen’.

Professionals returning to live and work in London, along with international students, are fuelling demand.

In some areas, including the City and east London, around 85% of applicants have been international students.

With the rental market so competitive, tenancy renewals remain at an all-time high – often more than 90% of existing tenants are renewing because they see there is a limited choice of properties available.

Source: Property 118

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Prime house price five-year forecast revised

Savills has released a revised five-year forecast for the UK’s prime housing markets, reflecting strong levels of activity in prime central London and prime regional markets, but also a backdrop of international and domestic uncertainty.

While the shape of recovery remains broadly as previously forecast in November 2021, the long-awaited bounce in values in prime central London has been pushed out to 2023. The firm expects prime central London’s house prices to grow 4% across 2022 (down from 8% previously forecast in November 2021). This reflects a slower pace of return of international buyers than anticipated, as well as the war on Ukraine and current domestic political instability which have caused a degree of caution that is constraining price growth.

Savills expects a more significant recovery in 2023, and has forecast growth of 7% (up from 4%), with the pace of demand from overseas expected to increase.

Over the next five-years, prices in prime central London are expected to rise by a total of 21.6%, despite a slight slowing of growth in the run-up to the expected general election in 2024.

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“Strong activity over the past six months, the relative value on offer and the prospects for global wealth generation together give us confidence that prime central London will continue to recover steadily over the next couple of years,” comments Frances McDonald, research analyst at Savills.

“However, the pace of return of international buyers has so far been slow, holding back the more rapid recovery we had previously anticipated. Early indicators suggest that things should improve over the second half of the year and into 2023, as high-net-worth buyers have gradually started to return to traditional prime postcodes such as Chelsea, Belgravia, Kensington, Mayfair, Notting Hill and Holland Park over the past three-months, boosting the outlook for price growth beyond this year.”

“In the longer term, requirements to register beneficial ownership of homes held in offshore vehicles have the potential to curb some demand amongst a limited number of buyers in the longer term. But, while historically there have been many benefits to using offshore vehicles to hold UK property, the tax advantages have largely already been removed. As such, we have only slightly reduced our outlook for prices over the next five years,” continues McDonald

In the more domestic markets of outer prime London, continued unmet demand from those looking to upsize and a lack of suitable stock will support price growth in the short term. Savills has forecast that price growth in these markets will average +5% in 2022.

But while the prime markets (broadly the top 5%-10% by value) are generally more resilient to interest rate rises and the increased cost of debt, they are not completely immune. Savills expects to see signs of price sensitivity creep into the market over the next six months, resulting in slower growth from 2023 onwards. This is expected to cap price growth at 13.6% over the five years to the end of 2026.

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“Over the medium term, the return of workers to the capital will fuel demand. Even as hybrid working becomes more conventional, workers still value proximity to the office and some of those who bought a home in the country during the pandemic are realising the need for a pied-à-terre, further supporting demand for flats,” continues McDonald.

“From 2023 onwards we are forecasting slightly lower levels of price growth with rising pressure on buyers’ spending power, though the effect of earlier than expected interest rate rises is likely to be offset by an easing in mortgage regulation and an increased flow of capital coming out of central London.”

Scotland, the Midlands and the North expected to perform the strongest in the long term

Following two years of unprecedented price growth (+16% since March 2020), the pace of growth in the prime regional markets has started to slow. However, activity continues to be strong and there remains an imbalance between supply and demand across much of the market, which will support price growth in the immediate future.

Savills forecasts that prime regional markets will grow by an average of 5% in 2022, led by growth in London’s suburbs (6%), with prices growing more steadily thereafter (18.8% over the five years to the end of 2026).

“Growth in the medium term will depend largely on further interest rate rises and the rising cost of living which will limit buyers’ spending power. This will have the most significant impact on markets where buyers typically take on more debt.

“As a result, we are likely to see a continued slowing of growth towards the end of this year, and whilst we are not expecting a significant correction in price levels, realistic pricing from vendors will once more become all-important. This will be particularly true for markets which have seen the strongest growth since the start of the pandemic, namely London’s suburbs and the coastal and rural markets in the south of England which performed phenomenally over the course of the pandemic,” concludes Savills’ Frances McDonald.

Longer term, the prime markets of Scotland, the Midlands and the North of England are expected to perform the strongest, due to greater capacity for growth (compared with those in the South). Savills has forecast 21.7% and 22.8% total growth over the next five years.

By MARC DA SILVA

Source: Property Industry Eye

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Overseas investors ‘will not be deterred’ from UK property by new rules

Despite measures and additional taxation to curb overseas investors in UK property, the asset class still holds great allure for a number of reasons.

On 1 August 2022, a new register of overseas entities was launched in the UK. This means anyone investing in or acquiring property in the UK from abroad will need to register with Companies House.

The aim of the register is to prevent individuals or companies buying property with illicit funds, but some believe the additional paperwork could serve as a deterrent for some legitimate overseas investors.

However, David Hannah, group chairman at Cornerstone Tax, believes the UK property market will still provide enough of an attraction to foreign buyers for myriad reasons, as it still presents an “exciting opportunity”.

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Big demand from overseas investors
Hannah points out that the UK property market is very much an international market, and it can therefore be affected by geo-political events all over the world.

“Even if domestic demand cools, I think international demand will increase and the UK market will be affected because of it. I don’t think foreign investment will be overly deterred by the new rules coming into place on 1 August.

“Property in the UK represents an exciting opportunity for foreign buyers because of the drop in the value of the pound.”

The historic house price growth has always provided an attraction to overseas investors, gaining the sector a reputation as a safe haven as it generally shows less volatility than many other asset classes.

In recent years, this growth has been even stronger due to a range of contributing factors.

Hannah comments: “UK house prices continue to rise at a staggering rate domestically, being pushed higher by factors such as the influx of oversea investors.

“In the past, factors such as the stamp duty holiday have caused more people to consider buying property. However, due to the increase in average house prices, it has made it more difficult than ever for buyers to purchase their first property.

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What’s in the pipeline?
Recent data revealed that overseas investors now own around £90.7bn of property in England and Wales. Around half of this (£45.3bn) is concentrated in London, which has historically attracted the most attention from foreign buyers.

This was according to research from Benham and Reeves, which also named the south east and the north west as the top two property investment destinations for those living abroad, after the capital. Overseas owners have around £15.6bn tied up in the south east, and £7.6bn in the north west.

In total, according to Benham and Reeves, 247,016 properties across England and Wales are owned by overseas investors. As well as the highest value of properties, the highest number of these can be found in London, with 85,451 foreign-owned.

One of the biggest draws in recent years has been the falling value of the pound, which makes it cheaper for overseas investors buying property here.

A challenge for anyone buying property right now in the UK is the supply gap, as less sellers have been coming to the market.

Hannah notes that the 24% rise in prospective sellers putting homes on the market offers hope that this trend could be easing, “thus causing a more manageable supply and demand level and potentially slowing the rapid rise of property prices”.

The register will also be applied retrospectively to property bought up to 20 years ago in England and Wales and since December 2014 in Scotland. UK property owners who live overseas should ensure they are up to date on the latest requirements.

Source: Buy Association

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Will new disclosure rules deter foreign buyers?

The UK property market continues its upward trajectory as recent data from Halifax shows that the average house price now stands at £294,845, which represents a 6.8% rise, or £18,849 since the start of the year.

Supply-demand imbalance continues to be the main contributor to the rising prices.

With inflation in the UK rising to 9.4% in the year to June – marking its highest rate in 40 years, many are expecting a sharp decline in the property market, but the influx of foreign investment for properties in the UK could continue to push house prices higher. Recent research from Benham and Reeves shows that overseas nationals now own almost 250,000 homes across England and Wales – amounting to £90.7 billion worth of property.

London continues to be home to the highest value of foreign-owned homes, with all of the city’s top five property deals in 2021 – all of them worth £20 million or more – involving Chinese billionaires according to Beauchamp.

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Following sanctions imposed to Russian investors there were fears that foreign investment would falter, however Chinese investors seem to have picked up the slack. There are now 85,451 properties (amounting to a total value of £45.3 billion) in the capital owned by oversea investors who are able to take advantage of the UK’s thriving market.

The drop in the value of the pound, which has fallen by 11% since the start of the year, seems to be one of the major appealing aspects of buying property in the UK. 61 luxury properties in London – each worth more than £10 million, have been sold in the first six months of 2022 – representing the highest number in a decade.

Even though overseas buyers are an important segment of the market throughout the UK, there have been attempts to deter foreign investment.

There will be an introduction of new rules that will come into force on 1 August. The new register of overseas entities maintained by Companies House means that buyers will be forced to declare their ownership and provide details of beneficial owners.

The register will be publicly available at Companies House and intends to dissuade individuals looking to buy UK properties with illicit funds. It is unclear how significant this new regulation could be and whether it will deter foreign investment in the UK property market.

David Hannah, Group Chairman at Cornerstone Tax, is not convinced that it will.

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“What people must consider is that the UK property market is an international market, meaning it can be affected by geo-political events all over the world.

“Even if domestic demand cools, I think international demand will increase and the UK market will be affected because of it. I don’t think foreign investment will be overly deterred by the new rules coming in to place on 1 August.

“Property in the UK represents an exciting opportunity for foreign buyers because of the drop in the value of the pound.

“UK house prices continue to rise at a staggering rate domestically, being pushed higher by factors such as the influx of oversea investors. In the past, factors such as the stamp duty holiday have caused more people to consider buying property. However, due to the increase in average house prices, it has made it more difficult than ever for buyers to purchase their first property.

“There is hope that more available properties will enter the UK housing market and the latest House Price Index shows an increase of 24% in the number of prospective sellers bringing homes to the market – thus causing a more manageable supply and demand level and potentially slowing the rapid rise of property prices.”

By EYE CORRESPONDENT

Source: Property Industry Eye