If you’re a property investor setting your sights beyond Canada, you may wish to consider the UK as your first overseas base.
Perhaps with the exception of Central London – which can command extremely high amounts – property prices in England, Wales, Scotland and Northern Ireland are pretty similar to those in Canada.
The UK is a popular destination for both long-term and short term overseas residents who choose to study or work in another country. The native population is also one of the densest in Europe.
For these reasons, there is always a need for new rental properties across the country.
So why invest in property in the UK? In this article, the specialists at Property Solvers – experts in helping homeowners that need to sell fast – reveal some of the reasons why British and Northern Irish real estate is so popular for overseas investors.
Ease of communication and access to information
While the real estate process in the UK may be somewhat different from Canada's, doing business in another English-speaking country can make things an awful lot easier. Buying property abroad can be complicated, so great communication is key.
It’s important to remember the time difference when awaiting responses to your emails (the UK is 5 hours ahead of Ottawa and 7 hours ahead of Edmonton), but a lot of the information you’ll need to research processes and legislation is available on the highly navigable gov.uk.
Whatever type of investment you plan on making, it’s likely that you’ll find an audience for it in the United Kingdom.
Busy urban centres always require more housing – from elegant townhouses in London to slick studio apartments in Manchester. Their nearby commuter towns – particularly those that are being redeveloped – are also great locations in which to invest.
Serviced apartments featuring gyms, social spaces and exclusive bars are a new trend that is becoming popular for younger career-focused city dwellers, so this option is great if you wish to make a larger investment.
Housing for students and young people will always be required in university towns such as Oxford or Cambridge, so this is worth considering.
Holiday lets are also very popular. Southern regions like Devon and Cornwall get the best weather in summer, so Airbnb properties and other rentals are in high demand there. The Lake District is a well-known beauty spot where short-term accommodation can be lucrative.
Return on investment
Because rental properties are particularly sought-after in major cities, it is possible to make an excellent return on your investment in a relatively short time.
London flats, for example, can be initially very costly to purchase. However, they command an average of 1,000 GBP per month (approximately 1,730 CAD) in rent. In Manchester, that amount comes to just over 770 GBP or 1,330 CAD).
Other regions, particularly in Scotland, Wales and Northern Ireland, are a little cheaper, but city dwellings and beauty spots will always be in high demand.
There is no time like the present to invest in UK property. The market is currently experiencing something of a lull due to ongoing negotiations surrounding the UK’s departure from the European Union.
While at face value this may sound negative, it actually offers a window of opportunity. The housing market tends to follow something of a cycle – after a recession, there is usually a boom.
Investing now and taking time to develop a property will mean you may be in a lucrative position once the market recovers.
Furthermore, there is the possibility that foreign property investors will soon be subject to an additional stamp duty land tax surcharge of 3% – and there may be other changes around the corner too, as a result of the UK’s newfound status.
To make the most of current legislation and to avoid later confusion about restrictions or changes, investing sooner rather than later is key.
How to get started
To be sure of success when planning your investment, follow the steps below.
Be sure you have the correct funds
It can be very difficult to get a mortgage in the UK unless you are a resident. The easiest way to be sure of success is to pay upfront.
You’ll also need to budget for taxes and other duties, as well as the cost of any renovations.
Get to know the process
In the UK, the process of acquiring real estate is a little different from Canada’s. Realtors don’t really exist – you’ll need to check out an estate agency and browse the properties on their books, then approach them if you see something you like.
It’s also best if you get yourself a UK-based conveyancing solicitor to ensure everything goes smoothly.
Research taxes and regulations
It’s likely that you’ll be required to pay different duties on a property you’re planning to rent out than you would do in Canada.
Property-related taxes include the above-mentioned stamp duty land tax, capital gains tax (if you decide to sell), inheritance tax (payable by the recipient if you leave the property to someone else in your will) and income tax on the amount you make through rent.
UK landlords have been the subject of increased scrutiny recently, partly because of relatively relaxed laws that have previously allowed the more unscrupulous among them to take advantage of cornered tenants.
For this reason, it’s important to keep up to date with what you are and are not permitted to do as a property owner. The upside of these changes is that a clearer “rulebook” is currently emerging to help new UK landlords to understand exactly what is required of them.
Once you’ve done your research and acquired your property, it’s very likely that your experience as a property investor in the UK will be a highly positive and profitable one.
If you’d like to find out a little more about UK property investment or discover top UK properties for sale across the country, simply get in touch with us at email@example.com. We’ll be more than happy to assist you.
By Justin Havre