Key Findings for South Africans Investing in the UK
Security & Stability
The UK Property market is highly protected by the country’s robust legal system
have emerged as prime investment destinations with high rental yields and strong tenant demand.
South African citizens have moved to other countries within the last 20 years
Investing in UK property from South Africa
The South African property market value has dropped by 30% of its value in hard currency terms over the last number of years due to a number of uncertainties. This has made looking further afield from South Africa to places like the UK more desirable.
The UK’s property market has shifted in recent years, in favour of regional cities and towns as opposed to the traditional London model, this has created difficulties for South Africans to identify the best areas in which to invest. For investors new to the UK market it is important to note the real estate market in the UK is a mature and stable market.
There are multiple options when looking to invest in UK real estate from South Africa. As a developer, SevenCapital provide an off-plan investment solution meaning investors can buy property that is in the process of being built. As an experienced developer, we recognise regions of growth, stability and demand which are typically the preferred strategy when looking to invest.
If you would like to learn more and look at options to invest in UK real estate from South Africa, you can contact our investment consultants based in Johannesburg anytime on our contact us page.
3 Steps For Your UK Investment When Investing from South Africa
Book a Face-to-face Strategy Meeting
With our local international experts to discover the right investment for you
Reserve Your Property Unit
Then use our Tax specialists, Overseas Mortgage and Foreign Exchange Services available
Customer Care Turn-key Solution
Receive supported aftercare and property management services with our 360 Customer Services
Is it a good idea to invest in UK property?
For expats earning foreign income abroad, the time has never been better to invest in UK property. Aside from being a secure and regulated marketplace, the two main reasons below highlight why overseas investors are capitalizing on a resurging UK property market.
Although cities such as London are experiencing a slower period than normal, due to investment from the government and city councils towards infrastructure and improved transport links – new marketplaces have emerged offering investors an opportunity to get a foothold on the UK property ladder. Central London has historically been the first choice for Buy-to-Let property, however due to inflated prices and average returns of only 2%, commuter belt towns situated around central London as well as regional cities such as Birmingham and Manchester have now risen in popularity.
The main reasons behind the shift is due to lower price points as well as higher projected returns of 5-6% in these areas. This provides investors with new markets more suitable for their financial circumstances and with better future prospects than central London.
How has Brexit effected UK Real Estate?
Despite the uncertainty surrounding Brexit, the UK looks set to maintain its position as a leading investment market for international buyers.
In a recent survey by Knight Frank of 155 leading property investors, 21% of the respondents said the UK was their preferred investment market, up from 11% the year before. This is excellent news for a market that remains robust despite the political shifts over the last two years. The UK is still recognised as a strong overseas investment target, with the primary reasons for investing in the UK being potential rental yields (43%) followed by its stability (32%).
For the UK, undersupply highlights a much more pressing issue. Over half of the surveyed investors (55%) in Knight Frank’s research identified their main challenge as ‘lack of stock’ when investing in the UK, with only 15% citing geopolitical uncertainty as a constraint. These statistics all demonstrate the strength of the UK’s investment potential right now. Opportunities available are still attractive, particularly in regions that are driving new investment and redevelopment.
Fees and Taxes When Buying UK Real Estate from South Africa
Purchasing Property in the UK for South African Investors
As with any investment, if you’re purchasing 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.
Completed Q3 2017
- Original £ per Sq Ft price: £215
- Avg Sq Ft Growth: +36%
- 1 Beds £110k – £150k = £40k (36% Capital Growth)
- 2 Beds £140k – £190k = £50k (36% Capital Growth)
- Actual Capital Growth Achieved: +36%. Avg Rental Yield: 7.7%
NOW SOLD OUT
Est. Completion Q4 2018
- Original £ per Sq Ft price: £282
- 2018 £ per Sq Ft price: £352
- 1 Beds £170k – £215k = £45k (26% Capital Growth)
- 2 Beds £200k – £250k = £50k (25% Capital Growth)
NOW SOLD OUT