The global pandemic has made it increasingly difficult to plan for the future. According to Fitch Ratings report, GDP levels in advanced economies are set to remain 3-4% lower than predicted for at least 4 years.
Investors are seeking to combat this by finding secure investments which have historically proven to remain worthwhile in times of uncertainty. For the UK, this means there has been a surge in the demand for properties from international buyers.
Overseas interest for properties in the UK
The UK has always had a steady demand for property. However, it has mainly been focused on the capital of London. Recently there has been a shift. Estate agencies are reporting increasing numbers of Hong Kong based buyers wanting to invest in properties based in the North.
Estate agent Dexter’s has shown that between December 2019 and June 2020 they had assisted $374 million worth of investment into PLC from Chinese and Hong Kong investors. This represents 20% of all transaction’s worth over £20 million in London.
They also revealed that PLC sales are up 85% in a year on properties which are worth over £2 million. This sharp increase in demand demonstrates how quickly the UK property market recovers and why overseas investors see the UK property market as a safe and relatively risk-free investment.
Why is there a sharp spike in demand from overseas buyers?
Presently there are 3 appealing benefits for international buyers wanting to invest in the UK.
The first of which is the current break on stamp duty land tax on all properties up to the value of £500,000. Non-UK based buyers can currently save up to £15,000 as a result of the SDLT.
The first national House Price Index released since the break has indicated that house prices have increased by 1.5% annually since the introduction of the SDLT.
Additionally, overseas buyers will have to pay a 2% surcharge from April 2021. So, buying property in the present before the surcharge is introduced can provide investors with significant savings.
Another reason for the recent increase in interest from overseas buyers can be attributed to the economic stability of the UK as a whole. This is often a vastly different environment to the market overseas investors may live in. London is recognised as a global financial capital as it offers many investment opportunities and a luxury lifestyle that only the capital can provide.
A look to the future
The pandemic is set to continue. As a result, it is highly likely that the interest from overseas buyers will continue to grow. The more people who make these investments and realise the UK’s potential, the more investors will follow suit and make these transitions for themselves. The return of overseas investors will be vital for ensuring the UK’s economic recovery post corona virus.