UK Real Estate, Should You Still Invest from Overseas?

Recently, the UK property market has had its fair share of challenges. Namely, we are talking about Brexit and COVID-19. This raises the question; is it still smart for overseas buyers to invest in UK property?

The answer is YES.

There are a number of reasons for this. Namely, low interest rates and a stamp duty holiday are having positive effects, as well as predictions of regional growth in the market. In addition, there has never been so much demand for housing, which means investors are going to benefit from a growing property portfolio.

A street of modern British terraced houses

Over the next five years, the prediction for growth of house prices is positive.

Indeed, the recovery in London has already begun. But there are other regions that are important in the country and that are going to experience growth above the national average. This is not always demonstrated by graphs but it is evident due to investments and new developments within cities.

Savills Five Year House Price Forecast

(2020—2024)

UK Hotspots

Where is Best to Invest

Of course, London has always been a fantastic place to invest. But property regeneration is taking off over the country and this means other major cities are appealing to investors. This includes Manchester, Leeds and Birmingham. Indeed, London prices have jumped in recent years and this can make property in other cities more affordable and profitable. Plus, property has become more appealing with better transport and connectivity.

Take Birmingham as an example. In the last 10 years, this city has been dramatically improved and regenerated. There has been a huge £500 million redevelopment at New Street Station, as well as £150 million being put into Grand Central shopping, making the area more attractive. There are also other developments in the works, including Paradise and Arena Central underway. There is even the HS2 development coming in 2031 worth £1 billion.

Binders with papers are waiting to be processed by unknown man accountant in blue blazer staying at home during covid pandemic. Taxes and audit concept

Know the UK Property Tax Rules

As an overseas investor, you are going to be drawn to the property market in the UK. Indeed, it can be a profitable place to invest due to market stability and the current growth being experienced in 2021.

However, it is essential that overseas investors examine the rules when it comes to UK property tax. Namely, you will have to learn what this means for international buyers. Elements to be aware of include stamp duty, as well as new additional surcharges. When you are educated on the rules, you can perfect your long-term returns. In addition, it can be beneficial to contact a financial advisor.

The Aftermath of Brexit

The Brexit deal is done and this has allowed the UK market to gain some stability. Indeed, this is good news and particularly for international investors. The UK continues to be one of the best investment markets.

Knight Frank conducted an interesting survey that demonstrated 21 percent of 155 leading property investors were located overseas. This is an increase from 11 percent from the previous year. Thus, despite Brexit and political changes, the UK market is still attractive for investors. In particular, 43 percent shared that the reason for this was good rental yields, while 32 percent said it was for the market stability.

One issue that was highlighted in this survey was undersupply. Namely, around 55 percent of investors highlighted this as a concern. Only 15 percent of investors were worried about geopolitical uncertainty.

The Benefits of a Long-Term Investment Strategy