International property investors interested in investing in London have been given an extra incentive to get moving on their purchasing plans. While Sterling has been weak, and the London property market unusually soft thanks to Brexit uncertainty, overseas investors have had the ideal buying conditions. But the uncertainty has also been unnerving, causing many people to adopt a ‘wait and see’ approach.
The question is – are we be about to turn the corner? Here are three reasons why we think it could be time for overseas investors to get their skates on:
- Stamp Duty levies for foreign investors
With campaigning now in full swing for another UK General Election, the main parties have been nailing their colours to the mast. Both the Conservative and Labour parties have unveiled plans to make it more expensive for overseas investors to invest in UK property – a crowd pleaser amongst many voters.
The Conservative party has said it will apply an extra 3% stamp duty surcharge for non-UK tax residents which would apply to companies, individuals AND expats. To put that into context, a foreign buyer who already owns a property and is buying a £1.5 million home would pay £183,750 in stamp duty compared to the current tax of £138,750. Admittedly, that is still tame in comparison to cities such as Vancouver and Singapore, who charge up to a 20% levy, but why spend thousands more on tax if you don’t need to?
Meanwhile, Labour is also proposing a levy on overseas buyers and wants to give UK nationals first refusal on homes built in their area.
The UK General Election takes place on Thursday 12th December 2019, and it’s likely that one of these two parties will be voted into power. We suggest you start your property search in earnest now to jump ahead of any new legislation.
- Sterling in recovery
In addition to this, we’re seeing the value of Sterling making something of a comeback. This is largely driven by election polls forecasting a majority Conservative win, bringing markets more certainty that a Brexit resolution is in sight. Sterling still has a long way to go to return to pre-2016 levels though, so we’re urging our overseas clients to act now and make the most of the ‘discount’ a weak sterling is giving them.
- Has the London property market hit the bottom?
Property prices in London are at their lowest since 2014, but there are signs of recovery. With the proposed stamp duty increases in the offing and an agreed Brexit deal on the table, this could well be the catalyst for overseas investors to make their move. Just make sure you’re one of the first.
If you would like to invest in property, and would like to discuss some of these findings in more detail, please email me at email@example.com