Investing in U.K. Residential Property

London is still king!

London is still king

 

 

For decades U.K. Residential property had appealed as an investment class for international investors. The steady nature of the UK economy has traditionally provided a safe haven for investors seeking shelter from the vagaries of their home economies. The combination of low interest rates and a weaker pound had fuelled a boom in the U.K. Property market.


Whilst the regions have shown marked improvement in both rising house prices and in the growth of rental yields since the Great Recession, it is the London property market that has won the hearts and wallets of the international community. We can see from the Land Registry statistics that 44% of the offshore structures holding registered property in the U.K. own property in London.

 

Stellar Growth of Residential Structuring

Interestingly, we can also see from the Land Registry data set that there has been a marked increase in the use of overseas companies buying residential property since 2008 / 2009. This growth was almost certainly fuelled by the heady combination of the cheap pound, rising house prices and investors from the Far East snapping up off-plan developments. 


This investment was, of course, not all bad news and came at a time when developers were struggling to obtain the necessary bank finance to get their developments off the ground. By selling off-plan overseas, it meant that the developer would have the wherewithal to get the project started.

We can also see from the Land Registry data set that there was a slight tail off in new overseas structures buying property. This is perhaps unsurprising as it marks the point in time when the government introduced ATED and CGT.

Perhaps more surprising is the bounce back in 2014 - the U.K. Government could not believe its luck when the new taxes didn't materially deter people and became significant revenue raisers.