British expats in the UAE and other parts of the Gulf are piling into the UK property market in order to beat the country’s stamp duty surcharge – but many will face hurdles, reveals one of the world’s largest independent financial advisory organisations.
The observation comes ahead of the introduction this April of a 3 per cent stamp duty surcharge on UK properties for buy-to-let investors and second homeowners compared with residential buyers.
“More than 70 per cent of all enquiries come from people living and working outside Britain. The overwhelming majority of these individuals – approximately 45 per cent – currently reside in Qatar and the UAE,” says Kevin White, Head of Distribution at deVere United Kingdom, part of deVere Group.
White is presenting a UK property and mortgage seminar in Abu Dhabi on February 9 for expatriates considering investing in the British isles. He will be joined by James Green, Senior Area Manager for deVere Acuma Abu Dhabi.
“There has been a 60 per cent month-on-month uplift in enquiries from Qatar and the UAE,” he adds, comparing January 2016 with December 2015. “Expats from these Gulf nations are now piling into the British property market.
“We attribute this rush-to-buy phenomenon to those expats who, quite sensibly, want to avoid being subjected to the extra levy. No-one wants to pay an extra 3 per cent in stamp duty,” he says.
Complications
While the UK Property market appears extremely buoyant, with some agents citing demand at a three-month high, there are extra complications for non-UK residents.
“Expats should know that they are typically deemed as ‘high risk’ by the vast majority of UK lenders,” White adds. “This is often the case even for those who have substantial assets and/or a high, stable salary. They are usually ‘red-flagged’ due to a lower UK credit rating as they have lived outside the UK, earned a different currency and worked for a non UK-based firm.
“Expats also need to consider other important factors including the pitfall of wasting money on excessive rates and the ability to reclaim tax within 18 months.”
“Therefore to avoid wasting time, effort and money, it is recommended that expats wanting to purchase property in the UK seek advice from advisers who have the relevant experience of cross-border financial matters, who will help them fulfil the criteria in an increasingly strict mortgage environment, and who have established relationships with the relevant UK lenders.”
To register for the deVere workshop on February 9, at the Westin Hotel in Abu Dhabi, email gemma.griffin@devere-acuma.com
