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Double stamp duty surcharge for overseas buyers to ‘level’ UK property market for locals, urges lobby group

The UK government should double the stamp duty surcharge overseas buyers must pay when purchasing a property in England, an industry lobby group has said.

The National Association of Property Buyers (NAPB) said doubling the stamp duty surcharge would “level the playing field” amid an influx of “wealthy foreign buyers”.

Under current rules, overseas buyers must pay an extra two per cent surcharge for a house they are going to live in, and an extra five per cent for any property that will not be their main home.

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However, the lobby group urged the government to double the two per cent surcharge, in arguing foreign buyers from “high income and low tax locations” are pushing up UK property prices.

The group added that the “collapse in sterling” after Liz Truss’ mini-budget created a “huge discount” for overseas buyers as it warned an increase in the surcharge is needed to fix housing “inequalities”.

Jonathan Rolande, a spokesperson for the NAPB said: “Foreign ownership is reducing available stock in the sales and rental sector and pushing up prices”.

He noted that hiking the surcharge would also “bring in additional funds for the treasury” as he said the UK government needs to “think bigger” in their approach to the housing market.

The calls come as figures show almost 250,000 UK properties worth a combined sum of £90.7bn are currently owned by overseas nationals.

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London continues to be the top destination for foreign buyers, with 85,451 properties in the UK’s capital owned by those from overseas.

Inside London, Westminster remains the top destination for overseas buyers, with £1.8bn worth of homes owned by foreign owners, while Kensington & Chelsea took second place with £10.7bn.

By Louis Goss

Source: CITY A.M.

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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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