UK properties offer superior and advanced investment options

Hamilton International Estates UK properties offer superior and advanced investment options

31 Oct 2018

The firm LXI REIT PLC, recently, bought five properties in the country for £109 million. The trust bought Travelodge hotel in Scotland and Edinburg, for £6.6 million, which was able to provide a net initial yield of 5.4%. It bought a Jurys Inn hotel for £30 million. Earlier, it had acquired the car storage facility in Corby for £60 million. It bought a store in Carlisle for £4.3 million. There are many different types of properties available in the current UK market where each option has its own unique benefit and drawbacks. The products have different types of taxation rules and profitability potential.  

The current taxation rule on capital gains on the sale of real estate requires the person to pay the levy, which is dependent on the value of the house. The taxes linked to buying properties and stamp duty is widely known. Such taxes apply to residential properties of value more than £125,000 and non –residential of value more than £150,000. It also includes the 3 percent levy on additional property or buys- to- let purchases. One can skip the stamp duty by flipping properties of value less than £125,000.

Growing cities

The recent analysis by Knight Frank on 43 key cities of the world found Edinburg prices gained 10.6 percent in the last 12 months, where it is second to Singapore in delivering highest growth in the real estate. Overall the prices grew 3.4 percent in the country but in London, the price dropped, while, the available rental properties dropped significantly in the capital to one-fifth in 2018 as compared to the last year, and the agents are able to get tenant four days earlier as compared to a year ago.

Government to scrap Help-to-buy

The help to buy option led to rising in Homebuilder shares. Currently, prospective buyers are waiting for the government to announce schemes to help ownership by younger buyers. The government also scrapped stamp duty for shared ownership of residential properties below £500,000.

The taxes on commercial units such as the lower value stores are low and steps such as support for small builders through housing infrastructure and bank guarantee can support smaller units. The government is also preparing to provide consultation on the additional taxes and stamp duties for residential buyers.

The new loan origination in June 2018 was 27 percent more in the first half of the year as compared to 2017, despite Brexit.

Government ministers are supporting the plan to end Help to buy by 2023 as critics say such schemes led to an abnormal rise in prices and treasury states the scheme will allow home buyers to buy new homes with 5 percent deposit for two years after 2021. The government is preparing to end the help to buy loan scheme after 2023.  The scheme supported one-third of private home buyers in the current year – where it was used to purchase of 170,000 homes by March.

The government is expected to cap the prices in London to £600,000 for homes bought through the scheme, in the South East the cap is set at £427,600, and in the North East, the cap is set at £186,100. Government is planning to impose restrictions on the scheme to prevent artificial inflation in some markets.

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