The housing market is in full flow.
Volumes on popular property search engines have increased dramatically following the relaxation of the Covid-19 lockdown.
Of particular note is the increasing interest in the UK residential property market from non-UK residents.
This attraction can be considered in light of the following:
• There are no restrictions on direct foreign property ownership in the UK.
• The additional 2% stamp duty surcharge for non-UK residents will take affect only from April 2021. In essence, this provides an additional incentive for international buyers in the UK. The government is not planning to change stamp duty in the short-term.
• Historically low interest rates make mortgage finance attractive.
• Sterling is at historically low levels against the dollar and other currencies which makes it appealing for international buyers to buy into the UK.
• Technology makes sourcing a property possible from anywhere in the world notwithstanding travel and quarantine restrictions.
• Many international buyers have immigration incentives to buy into the UK. The government has recently stated its intent, in the event that China presses ahead with new security laws, to offer rights to live and work to nearly 3 million Hong Kong citizens eligible for a British National Overseas passport. Currently, a limited right is available to about 300,000 Hong Kong residents. A similar tactic may be utilized by the government post-Brexit as it seeks to secure favourable trading arrangements in other parts of the globe.
Time will reveal the impact of foreign buyers on the UK property market. In particular, whether there will be an impact on pricing relating to prime London residential property or in other parts of the country.
UK residents currently face tough mortgage approval conditions especially if they are impacted by being furloughed or have other credit problems.
First time buyers who already face competition for properties from Buy to Let landlords now also have to consider the competitive threat from non-UK residents.
Should you require any further information regarding property law, please do not hesitate to contact our Mr Bill Dhariwal, Managing Director, Lawcomm Solicitors, DDI: 01489 864 117, E: bill.dhariwal@lawcomm.co.uk
Please note: The above article was written on 06 June 2020 and does not constitute specific legal advice.
