The UK, especially its major cities, has attracted a whole host of property investors over the years. This includes investors from overseas. There are a variety of reasons the UK is seen as one of the most valuable property markets in the world, drawing in investors from across the globe. At GetGround we see this international interest reflected in our customer base, with 51% of our investors being based internationally. Let's take a look at the six reasons the UK is a favourable destination for international investors...
1. Taxation Benefits
For international investors, the UK remains a tax-friendly destination, with the ability to get competitive returns. Stamp Duty Land Tax (SDLT) for overseas investors only sits at an additional 2% on top of what it is for locals. This, paired with the fact that there is no additional dividend tax for non-residents, puts the UK as a great option for international investors. Especially considering these attractive tax regulations can’t be said for some other major cities. Singapore’s SDLT, for example, reaches as high as 66% and in Hong Kong, this sits at 15%.
2. Ease of borrowing
These financial benefits spread from tax to borrowing. Namely, lenders in the UK are willing to give non-residents a high LTV ratio when it comes to mortgages. Through this, investors can put offers down on more expensive properties. This will ultimately allow them to reap the rewards as the value of their property climbs over the years.
3. Strong demand for rental property
UK property entices local and international landlords alike. Namely, there is a strong demand within the market. This demand has been amplified over the past year and a half, with Zoopla citing 18 months of double-digit rental growth. Currently, the annual rental demand increase is 10.8%, so investors can enter the market knowing that there is a want for rental properties in the UK. Unlike many other countries, it is common practice for UK tenants to complete extensive referencing checks carried out by third-party specialists before receiving their lease agreement. These typically include credit checks, previous landlord references, confirmation of employment, affordability, and visa status for non-UK citizens. This detailed process can give investors peace of mind that their property will be looked after and no blocks will be faced further down the road.
4. Limited restrictions
When investing in UK property you get the pick of the bunch: flats, landed properties, built-to-rent, serviced apartments, and the list goes on. This luxury isn’t true for all markets, for example, Thailand and Singapore prevent international investors from purchasing properties which requires them to purchase the land it is built on too. With your choice of options in the UK as a result of limited restrictions, you have the chance to tailor your investment journey to what suits you.
5. Ease of selling, should you choose to do so
This freedom doesn’t stop at buying, it continues through to your selling journey. You are afforded the opportunity to sell to buyers from any country, unlike in Australia where overseas buyers can’t put offers on second-hand properties. Being able to sell to any potential buyer gives you the chance to secure the best offer on your property.
6. Flexible structuring
These favourable restrictions mean that international investors can also easily structure their property investments. Forming a limited company for UK buy-to-lets can be done from anywhere in the world and investors aren’t required to be British nationals or residents. When setting up a company for property investment with GG Company you are given access to a UK business account where you can centralise outgoing payments and rental income. Foreign currency exchange is another feature accessible through the business account. Hassle-free structures like this can make the experience as an international investor even smoother when buying buy-to-let in the UK.
To invest in the strong and ever-growing UK market and to learn how to become an international investor with ease, book your free consultation today.