The fact that so much prime property in London is being snapped up by buyers from the Middle East, Asia and Russia has already been well documented, as many are lured in by the weakness of sterling compared to their own strong currencies. In addition, London is traditionally seen as a safe haven that provides both good rental yields and capital appreciation – but now it looks as if many British expats are being encouraged to buy property back home, too.
According to a report in the Telegraph, property prices in London have increased by 7% during the last 12 months, and are expected to rise even further, something that has led to an increase in the number of expats coming back into the property market. Many live in countries where the exchange rate works in their favor, and so they see buying property as a less volatile investment than the stock markets.
Knight Frank, who holds exhibitions of UK property in Shanghai, Hong Kong, Singapore and Kuala Lumpur, points out that anyone working in Singapore and buying property in London effectively receives a 20% discount due to the current weakness of the pound.
Expats also have another advantage over international investors, as they are likely to have much better local knowledge, and are much more able to know the best areas in which to invest and which to avoid. Brits living abroad can also benefit from the fact that many UK property developers give incentives to international investors which often aren’t available to UK buyers. These include such things as property price discounts and rental guarantees.
Finally, British expats can also take advantage of the fact that anyone who is non-resident in the UK for at least five years is no longer liable for capital gains tax, and most gains do not need to be reported to HMRC from the second tax year of departure onwards.