The UK government has lifted the stamp duty threshold for residential property from £125,000 to £500,000
UAE buyers are flocking to the London property market as the UK records its highest ever sales.
The British capital is attracting Dubai buyers who are looking for a second home to diversify their investments, according to experts.
UK property site Rightmove recorded more than £37 billion ($49 billion) of property sales between July 12 and August 8 – the highest ever agreed in a month since it began tracking the housing market more than a decade ago.
The London market has seen increased interest from UAE buyers, Stan Ennor-Glynn, head of international residential sales at property firm Savills Middle East told Arabian Business.
Given the huge effect of coronavirus on the UAE’s tourism industry and the weak oil price, locals are diversifying their investments into safe places around the world – and London is top of that list, he said.
Ennor-Glynn said London is the beneficiary of “years” of pent-up demand being released into the market following the political uncertainty of Brexit and the country’s three-month coronavirus lockdown. Initially during lockdown we saw the brakes put on UAE sales but since Ramadan, we have seen record interest – mainly from owner-occupiers.
The property expert said he predicts a slew of deals once flights between the UK and the UAE are fully opened up and quarantine rules are relaxed.
Owner occupiers want to physically see and touch the properties but unfortunately they haven’t been able to do that right now, he said. I expect there will be a lot of transactions once flights have opened up.
In an additional boon for global buyers, the UK government has lifted the threshold at which people start paying stamp duty for residential property from £125,000 to £500,000.
The change, effective immediately, is a temporary measure designed to boost the housing market and the measure will remain in place until March 31 2021 next year.
Properties over £500,000 will pay stamp duty, however the rising of the nil rate band means they will pay £15,000 less than before.
The removal of stamp duty has given a shot-in-the-arm to the market, said Jacob Sullivan, sales director at luxury property developer Regal London. It has galvanised UK buyers and there is a follow-on international galvanising effect. London is still a very safe market.
According to Savills data, UAE nationals are drawn to higher end properties valued at £1.5 to £2 million plus. However, non-native UAE expats are purchasing less costly stock from £700,000 upwards as buy-to-let investments.
Ennor-Glynn said UAE buyers are showing interest in the Kings Road and Battersea areas, as well as White City – which is home to one of London’s biggest shopping malls.
UAE buyers tend to look for larger properties for their families, he said. They are also seeking luxury touches, such as concierges, swimming pools and underground parking.
Regal London’s Sullivan said he has noted increased UAE, Saudi Arabian and Kuwaiti buyer interest in the firm’s St John’s Wood and Kensington developments.
There is a lot of interest from owner occupiers, he said. Registrations and transactions are up on this time last year. It’s been a welcome surprise.
According to Sullivan, the COVID-19 pandemic has caused buyers to think about their lives in a “more long-term” manner. This trend is driving owner occupation interest, whether it’s full-time homes or pied-a-terres, he said.
Andrew Hawkins, director at Rocket Properties – the developer behind The Atlas Building in London’s Shoreditch – said the area is attracting significant Arab interest.
Dubai dwellers are used to high-rise developments like ours, he said. Culturally they are comfortable with high-rise living.
Hawkins added that Shoreditch – close to the City of London and Old Street – has particular appeal for UAE buyers looking at lower price points with the opportunity for higher yields and capital appreciation.
Ennor-Glynn said he remains bullish on the London property market going into 2021.
London is the number one choice for Middle East investors because it outperforms every other market, he said. I predict that Gulf interest will remain high, particularly if sterling remains good value for international buyers.