Decline In Pound Attracts Middle East Investors To UK Real Estate

Decline in pound attracts Middle East investors to UK real estate

16 Nov 2018

Brexit Impact on the UK

The Brexit impact could be seen on the pound value, which suffered one of the biggest declines in the last few months. However, investors believe the no-Brexit trade deal may be finalised in the year, and it is assumed that the pound rate will increase significantly if a trade deal is made.

At the same time, Middle East investors are picking deals from UK property, mostly in buy-to-let, before March 2019 due to attractive mortgage rates and the decline in the currency value, which offers exceptional opportunities to grab deals at the desired prices.

Many foreign investors believe this is the right time to invest in UK property as the mortgage rates are one of the lowest, and many new opportunities are available in buy-to-let as the pound is declining. Several buyers are grabbing deals in uncertain markets amidst unpredictable eco-political situations.

Tax Changes From April 2019

It is assumed that non-UK residents will be subjected to tax gains on the property from April 2019, where sales and income through the property will be taxable. The proposed regulations have announced the latest modifications, where the non-residents who invest through collective schemes will come under such tax rules. 

It will prevent the additional layer of direct taxes. However, there are many points of consideration in the new scheme as the companies offering such property will be treated as offshore unit trusts, and such unit trusts are included in the tax net property.

Why The Market Appears Worthwhile?

The decline in property prices in central London attracted investors from UAE, while investments increased by over 20 per cent in some of the foreign-sourced property markets in London.

In addition, Brexit has proved beneficial for buyers seeking such opportunities as the confusion during this time led to a decline in the price of homes and pound rates, further making the property attractive.

Overseas investors are getting lucrative deals now, and Dubai-based landlords have already invested £14 million in the country's real estate markets, including buy-to-lets and newly constructed homes.

Such investments are believed to be a once-a-generation kind of investment opportunity. There has been a rise in the appeal for assets in the capital city London, from the Middle East, mostly due to currency advantage and fixed US dollar exchange rate. The chance of sterling recovery has increased the chance of getting property value shortly. 

Regions Attracting Most Investments

The new figures from ONS find that at least 7 out of the top ten growth regions in the country are in the North of England, and the nine biggest sales drops were reported in the southern region.

The average home price in the UK is £228,000 (according to the latest Land Registry data), which is 43 per cent higher than the average house price in the Northwest, i.e. £159,000 – as per ONS data.

Property dealers believe family homes are still affordable in most regions, and sales of such property increased significantly in the regions - Manchester, Leeds, and Liverpool.

London prices increased approximately 72 per cent in a decade, but the price growth slowed in the last few months, offering opportunities to overseas buyers.

To know more about UK properties, click Hamilton International Estates.

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