The UK property market is booming, and cities like Manchester and Birmingham offer overseas investors one of the most reliably profitable and affordable markets in the world. All indications show that house prices will rise substantially over the next five years, making UK property a premium investment opportunity.
However, time is of the essence. Changes to Stamp Duty Land Tax (SDLT) mean that investors should buy sooner rather than later to secure the best deal possible and ensure high rates of profitability in their portfolios.
Four years ago, a 3 per cent SDLT surcharge was added to any residential property which was purchased for buy to let. The charge increases depending on the value of the property you are buying, up to a rate of 15% for properties worth more than £1.5m.
Now, the UK government has announced new plans in its latest Budget to introduce an additional surcharge of 2 per cent for overseas buyers of UK buy to let property. This will be introduced in April 2021 and it is expected that this will generate a surge of property transactions over the next 12 months – meaning competition for the most desirable city centre apartments will increase even further.
Additionally, the current weakness of the Sterling means that overseas investors are operating at a functional discount in the UK property market. When purchasing an off-plan property at a below-market rate, this advantage is magnified.
Therefore, the next 12 months is a crucial period for non-UK investors looking to grow their UK buy to let property portfolios by taking advantage of the favourable conditions ahead of tax increase planned for April 2021.
If you would like more information on investing in UK buy to let property – and making the most of a booming market – please get in touch with the Alliance Investments team today.
Alliance Investments, 21/Floor, The Centrium
60 Wyndham Street, Central, Hong Kong