Your complete guide to:

Investing in UK Property from Overseas

The UK’s property market is widely considered a safe haven for property investors. In this feature, property consultancy Town Square Invest outlines all you need to know about investing in UK property from overseas.

Is the UK property market
a safe haven for overseas investors?

The popularity of the British property market and its ‘safe haven’ status has attracted foreign investors for many years, with investors flocking to the UK from all corners of the world with investors from Asia, the Middle East, South Africa, and Europe favouring the UK’s property market.

Following the financial crisis back in 2008, the UK’s property market remained robust, especially when compared to previously strong markets such as the US, Australia and UAE where, in some places, saw property prices decline by 65%. The UK’s property market was naturally affected by the crisis however, the reductions were not as severe as elsewhere, which meant the UK retained some of its popularity.

In the years following the global economic crisis, UK property values climbed at a rapid pace, and with the country formally in a state of economic recovery since mid-2014, the property market’s appeal continued to attract investment from around the world.

Despite Brexit and the Covid-19 pandemic, there are many reasons to be positive about the UK property market. Even at a time that could be described as ‘uncertain’, the sector appears to be improving all the time, with both capital gains and potential returns expected to continue to grow in the months and years ahead.

For those investing in UK property from overseas, the regional predictions for the UK market are generally favourable, with experts from Savills expecting to see growth average growth of 21.1% by 2025.

Best of all, traditional hotspots like London are no longer the most profitable options for overseas buyers. According to Savills, investors have an opportunity to take advantage of the lower entry-level prices and varied property options available across the regions that offer a faster rate of growth than what is predicted in the capital.

Savills, one of the largest organisations in the UK, predicted that despite Covid-19 – prices are expected to finish this year 4% higher than at the end of 2020.

As the UK’s successful vaccination rollout continues and lockdown comes to an end, new confidence in the market will likely see further investment into the property market from UK and overseas investors.

Download your FREE guide
to UK buy to let investment property

What’s in the guide?

  • UK as a Global Property Hotspot
  • The Best Locations for Buy-to-Let Returns
  • Discover the Best Asset Class for ROI
  • Jargon Buster: Terms Explained
  • Why Now is the Time to Invest in UK Property
Download your FREE guide
to UK buy to let investment property
Access the investment brochure

The rise of the regions

Over the last few years, one of the main positives for the UK property sector and investors has been the rise of the regions.

As values skyrocketed in the capital, regions outside of London – including commuter belt areas in the East of England like Brentwood – have started to gather momentum from buyers and renters alike. In recent years, where property prices in London have significantly outpaced wage growth, savvy buyers and renters who want more space for their money have shifted their search to areas that offer excellent transport links into the capital. This rise in demand has seen property prices and rents outpacing the growth seen in London.

And it’s not just locations with easy access to the capital that have benefitted from rising values.

According to Zoopla’s April 2021 House Price Index, in the year to April 2021, average London values climbed by 2% and notably under the 4.1% UK average. When compared to regional cities in the north, Liverpool (+6.9%), Manchester (+6.8%), Birmingham (+4.7%), and Newcastle (+3.9%), these prominent UK cities are seeing significantly stronger rises than in the capital.

The lower entry level of these markets has also seen rents climb at a faster pace, with HomeLet’s May Index highlighting that rents in London continue to fall year-on-year, with a 0.9% drop between May 2020 and May 2021. When compared to the rest of the UK, 11 of the 12 regions monitored by HomeLet showed a year-on-year increase in rental value, with the East of England (London commuter belt area) increasing by over 8%.

Overseas investors considering UK property investment should pay attention to market trends to help underpin their returns and, with a shift towards a hybrid of office and remote working, areas outside of the capital are showing a real shift in power.

Did you know that the UK is the world’s most
‘transparent’ property market?

The UK is widely considered a ‘safe haven’ for property investors and has a proven track record in delivering rental returns and capital growth. With a clear buying process and strong property ownership laws, the UK attracts investment from all corners of the globe.

According to the Global Real Estate Transparency Index published by JLL, the UK remains the world’s most transparent market for real estate investing. The index also included popular investment areas London, Manchester, Birmingham, Edinburgh, and Glasgow in the world’s top 15 most transparent cities.

This independent acknowledgement further enhances the trust and stability of the UK’s property market for overseas investment and provides an additional layer of security for international buyers searching for a secure market to invest their money in.

Transparency in all areas of real estate remains a key priority for investors, businesses and consumers and we need to ensure that it continues to improve further and faster to compete with other asset classes and meet heightened expectations about the industry’s role in providing a sustainable, resilient and healthy built environment,

Is overseas property
a good investment?

Before investing in a UK property, it is always important to consider your motivations and what you want to achieve from your investment.

A buy to let property investment provides investors with the opportunity to secure a monthly rental income and house price gains over time however, it is advisable to establish exactly what you want to achieve before investing.

This investment is for you if:
  • You want to enter a stable property market
  • You want to secure reliable rental returns
  • You understand that property values fluctuate
  • You are looking for a fully managed asset
It is not for you if:
  • You are looking for a visa
  • You or a relative want to live in the property
  • You are looking for a holiday home
  • Need to flip for a quick profit

What is the best property
investment in UK?

According to a 2020 Savills report, following ten years of gains, UK housing stock now worth a record £7.39 trillion.

The same report highlighted that the value of the UK’s private buy to let market has doubled over the same period and is now worth a staggering £1.62 trillion (up 124% over the last ten years). The number of available privately rented homes on the market has increased by 50%.

With the demand for buy to let property unable to keep up with demand, residential buy to let investors are still able to profit from this lucrative market segment. New build apartments in prime locations often offer some of the highest rental yields available on the market.

The UK’s student property sector is another key market that has delivered reliable and consistent rental returns over the last 10 years.

Once a niche asset class, the Purpose Built Student Accommodation (PBSA) sector has delivered some of the highest returns available on the market today.

This market segment is worth around £60 billion (Cushman and Wakefield) and is considered a popular choice for portfolio diversification.

Our range of fully managed UK property investments

Our selection of UK buy-to- let properties offer reliable rental assurances,
so you will know exactly how much income you will generate.

Residential Apartments

Queen Street

  • City centre apartments
  • Strong capital growth potential
  • Off plan development
  • Q4 2022 completion
MORE INFO

Residential Apartments

Michigan Towers

  • 6% NET assured for 2 years
  • Strong capital growth potential
  • Prime city centre location
  • Luxurious finish
MORE INFO

Residential Apartments

Manchester Waters

  • 6% NET assured for 2 years
  • Studio, 1, 2 & 3 bed apts
  • UK property hotspot
  • Luxurious finish
MORE INFO

Residential Apartments

Chatham Waters

  • 6% NET p.a. for 2 years
  • Completed waterfront apartments
  • 36-mins from London by train
  • Luxurious finish
MORE INFO

Student Accommodation

Silk Mill Suites

  • 7% NET p.a. for 3 years
  • Fully furnished and managed
  • The closest new-build to the university
  • Completed & operational
MORE INFO

Residential Apartments

Hadrian's Tower

  • Luxury city centre apartments
  • Completed and furnished
  • 5% NET p.a. for 5 years
  • Fully managed buy to let
MORE INFO

Residential Apartments

Studio 52

  • Receive 7% NET per annum
  • Completed and operational
  • Furnished & fully managed
  • City centre location
MORE INFO

Residential Apartments

Library House

  • Up to £2,500 Stamp Duty saving
  • Completed and operational
  • Prime location
  • Excellent growth potential
MORE INFO
Reliable, stable returns
With a record number of people renting, investors can secure rental returns that are underpinned by a high demand.
Capital growth potential
The tangible nature of property makes it an ideal option to help your money grow in a safe and secure asset.
Ideal for UK & Overseas investors
With clear property laws and an established buying process in place, the UK is a safe haven for investors.

Start your investment journey today...

Before entering an investment, it is important to establish your exit strategy for selling your UK property.

With xxx transactions, there is an unprecedented demand for UK property means selling your UK property is a simple process.

If you have purchased a residential buy to let property, you will need to find a local estate agent to assist the sales process. If your property is fully managed, they will be able to work alongside the estate agent to arrange viewings.

If you own a student property, check to see if there is a buyback option in your contract and the terms that are in place. If there is no buyback in place, your first point of call should be the management company that operates the building – they may have a waitlist of buyers or they may wish to purchase your property themselves. No matter what type of property you are selling, you will need to appoint a solicitor to oversee the sales process and to ensure that all the necessary legal paperwork is in place.

As a foreign investor, do I need a visa to buy property in the UK?

No, foreign and overseas investors do not need a visa to purchase a property in the UK as a foreign investor.



Although you do not require a visa, you must seek independent advice to determine the best approach for your property purchase from an experience expert.

What taxes do I need to pay while buying a property in the UK?

If you are considering buying an investment property and you are based overseas, it is important that you seek independent tax advice to determine your financial responsibilities and tax obligations.

The HMRC website states that if you live abroad for 6 months or more per year, you’re classed as a ‘non-resident landlord’ by HM Revenue and Customs.

VAT

It is not common to pay VAT on residential property purchases however, commercial property transactions may be subject to VAT. Whether a commercial property transaction is subject to VAT will depend on a number of factors, mainly being whether it is regarded as a “new” property or whether the seller has opted to tax the property. If you are buying a commercial property, it is worth seeking independent advice from a trusted company to ensure that you understand your obligations.

If you are considering purchasing an investment property in the UK, speak to your appointed solicitor to determine your financial obligations. They will be able to provide you with information related to the property you plan to purchase.

  • You may need to pay tax on your rental income
  • You may be required to pay Capital Gains Tax when you sell your property
  • Stamp Duty tax – see section below

Stamp Duty Land Tax

From 1 April 2021, different rates of Stamp Duty Land Tax (SDLT) will apply to purchasers of residential property in England and Northern Ireland who are not residents in the UK. The rate is 2% higher than those that apply to purchases made by UK residents.

UK property market terms
for overseas investors
  • UK Property Market Phrases and Terms Explained
    When you purchase an investment property overseas, you may be faced with language, laws, and rules which you are unaware of. In this section, we break down the terminology you may come across when buying UK real estate.
  • Land Registry
    A government department created to register the ownership of land in England and Wales, Land Registry is where evidence of ownership is documented including third party rights.
  • Types of Property Ownership

    Freehold

    Freehold ownership means that the building and the land it stands on is owned by the purchaser. Freehold ownership typically applies to houses and the buyer is responsible for maintaining the structure of the building. For apartment blocks, the development is owned on a Freehold basis. The owner is able to grant leases on apartments within the development. Freehold ownership is still subject to certain restrictions and these should be considered when purchasing a property.

    Leasehold

    Freehold ownership means that the building and the land it stands on is owned by the purchaser. Freehold ownership typically applies to houses and the buyer is responsible for maintaining the structure of the building. The most common way to own an apartment in England is on a Leasehold basis. The lease is granted by the Freeholder and longer leases typically have a higher value. Investors should ensure the lease is over 100 years or longer. As a Leaseholder, you are obligated to pay a yearly Ground Rent and a Management Fee. This will vary depending on the development and you must ask your solicitor to outline the terms of both fees and any potential contractual increases.

  • Council Tax
    Council tax is a tax set by each locality on UK properties that may be used as dwelling, regardless of whether owned or rented. Landlords must ensure that there is an assured tenancy in place where the tenant pays the tax. If there is no tenant in place, or the property is unoccupied, owners are liable to a pay.
  • Property Licencing
    Across the UK, some local councils have launched landlord licences. The fees vary depending on the council and you will need to establish whether your property will require a licence.
  • As a foreign investor, do I need a visa to buy property in the UK?
    No, foreign and overseas investors do not need a visa to purchase a property in the UK as a foreign investor. Although you do not require a visa, you must seek independent advice to determine the best approach for your property purchase from an experience expert.
  • What taxes do I need to pay while buying a property in the UK?

    If you are considering buying an investment property and you are based overseas, it is important that you seek independent tax advice to determine your financial responsibilities and tax obligations.

    • You may need to pay tax on your rental income
    • You may be required to pay Capital Gains Tax when you sell your property
    • Stamp Duty tax – see section below
  • Stamp Duty Land Tax
    From 1 April 2021, different rates of Stamp Duty Land Tax (SDLT) will apply to purchasers of residential property in England and Northern Ireland who are not residents in the UK. The rate is 2% higher than those that apply to purchases made by UK residents.
  • VAT
    It is not common to pay VAT on residential property purchases however, commercial property transactions may be subject to VAT. Whether a commercial property transaction is subject to VAT will depend on a number of factors, mainly being whether it is regarded as a “new” property or whether the seller has opted to tax the property. If you are buying a commercial property, it is worth seeking independent advice from a trusted company to ensure that you understand your obligations.

    If you are considering purchasing an investment property in the UK, speak to your appointed solicitor to determine your financial obligations. They will be able to provide you with information related to the property you plan to purchase.

Still need help?

Our customer support team is here to answer all your questions...

Call us

Call us

Talk to us directly over the phone for additional information

London: +44 (0) 203 283 4590

Email us

Send an email

Email us at anytime and we will respond as soon as possible

[email protected]

Office Hours

Support hours

Monday-Friday

09:00 to 18:00 GMT