South Africa Property Trends in 2021
After a turbulent 2020, are we seeing a pattern of recovery starting for South Africa? While the entire global stage has been impacted by the pandemic, both South African property and the economy was particularly hard hit. Now, after a bounce back at the start of 2021, the country is forecasting a brighter future ahead.
Each month, we’re examining the South Africa property trends in 2021, taking a closer look at the local market and seeing how that compares with other global markets – with a particular focus on why investors are investing in UK property from South Africa in 2021.
Investing in UK Real Estate from South Africa
After the challenges of 2020 and the current pandemic, new predictions for the UK property market are booming. With growth expected in key regional areas over the next five years, plus London’s slow recovery, we’re now seeing a market more varied than ever.
If you’re investing in UK property from South Africa, here’s where you should be considering. Our 2021 UK Investment Guide is filled with the key insights you need to make an informed decision and is completely free.
Hit the link below and download your copy of the 2021 UK Investment Guide today.
Is It a Good Idea to Invest in the UK from South Africa?
For both expats and domestic investors, the time has never been better to invest in UK property. A secure, reliable market, there’s several reasons why overseas investors are capitalising on a surging UK property market.
While growth in traditionally popular choices such as London has slowed, new marketplaces have emerged, providing investors with an affordable entry point into fast-growing investment hotspots. Regional cities such as Birmingham and emerging commuter towns in the South East are generating average returns above 5%, beating the average 2% rental yield you can find in Central London.
This is largely being driven by increased investment, new amenities and a higher quality of living, delivering sustainable tenant demand for an asset already known for its reliability.
3 Steps For Your UK Investment When Investing from South Africa
Book a Face-to-face Strategy Meeting
With our UK expert in South Africa to discover the right investment for you
Reserve Your Property Unit
Then use our Tax specialists, Overseas Mortgage and Foreign Exchange Services available
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Receive supported aftercare and property management services with our 360 Customer Services
Fees and Taxes for South African Investors
As with any investment, if you’re purchasing a property in the UK it’s vital to understand both UK and South African tax liabilities as well as how to structure your investment in an efficient manner. In the case of the UK, taxation liability is determined by a person’s residential and domicile status, so working this out is a sensible first step for South African investors.
Essentially, an individual is considered a UK resident if they; spend 183 days or more in the UK during a tax year, arrive with the intention of staying permanently or to work in the UK for three years or more. Social and business ties can have an effect on resident status but will largely be considered on a case-by-case basis.
South African Investment FAQs
Am I able to leverage my local property in SA to purchase in the UK?
Remortgaging to buy property abroad is a common tactic for investors, provided you have access to borrowing services in your chosen country.
Again, research lenders in the area and speak to an expert to figure out whether it’s the right move for you. If you’re buying abroad it’s vital to have knowledge of the local area so you can ensure you’re aware of investment potential and what returns you can expect.
Can I attain residency through buying property in the UK?
No, owning a property in the UK does not provide residency. If you do not have right of residence in the UK you can only use the property as an investment or a holiday residence – this means you can stay there for as long as your passport or visa permits.
While EU residents had the right to reside until Brexit, this does not constitute residency, which is a completely separate process for international investors.
Can I mortgage a unit as an SA investor?
Of course, SA investors are free to get a mortgage in the UK but it does come with some caveats.
While there are a wider range of products for international buyers in the UK, SA investors should be aware that the application will typically be a longer process.
For the majority of investors, the lender will require proof of id alongside tax returns from their country of residence to prove income, as well as any business accounts or personal statement assets being verified by an accountant. This is simply to understand your current income, tax position and a detailed understanding of your personal assets and liabilities.
What does an SA client need to purchase a property offshore?
For any investor purchasing property offshore, several things are required.
Firstly is the reservation fee. This will be required, along with a proof of ID and address, at some point after you choose your preferred unit. Following that, depending on your purchase type, you’ll move ahead with a cash payment or deposit and mortgage for the remainder of the purchase.
SA investors should also consider whether they have funds moved offshore, if not they’ll need to apply for tax clearance. It’s advised that SA investors work alongside a specialist foreign exchange partner to ensure the best rates as the rand can be a volatile currency.
Finally, consider how you’re financing the property. Are you borrowing offshore? In which case you’ll want to make sure you’ve researched and applied for that well in advance. Again, work with a specialist lender. Mortgage products for international buyers are more prevalent than they used to be but its important to be well prepared.