Investing in the UK from Dubai
Our team in UAE understand that investing from overseas into the UK can be a daunting process. As experts in this field, not only do we have developments in key locations we also can help you with services such as:
- Finding and securing a UK mortgage
- Getting legal support
- Tax advice and setting up a UK limited company
- FX trades
- Letting out your property
Our full 360 degree, hands-off Customer Care service for all clients saves you time and stress of managing your property investment from overseas.
Watch: Take Advantage of Tax-Free Living with Property Investment
With the UK market currently experiencing incredible demand, low interest rates and the Stamp Duty holiday, there’s never been a better time to invest.
No.1 Developer – Financially Strong
SevenCapital is a property investment company in Dubai, based in the UK. A financially strong property developer, and one of the largest privately owned real estate and development companies in the UK. Operating across residential, commercial and hospitality sectors we have built an extensive portfolio of projects, with a value in excess of £2.1 billion, spanning more than 7.8 million square feet and employing more than 130 dedicated property and construction professionals.
Premier UK Locations
SevenCapital has become synonymous with building stunning residential apartments in key city-centre locations. We are leading the regeneration of other up and coming areas as they develop into new, desirable residential locations. We choose the areas that will be most suitable for investors; where good growth potential exists, where tenant demand is increasing and where there is excellent and direct access to key city amenities and major transport links.
We want your experience with SevenCapital to be as easy and convenient as possible, so we have invested more than £2 million in our Customer Service Team, to ensure that the service we offer to all our investors is first-class. We provide a fully managed “hands-off” investment service with a full-time Customer Service Team to ensure you’re supported at every step. As a property investment company in Dubai, we’re dedicated to having a team in the UAE, ready to help with any queries you might have.
The Grand Exchange
Final Off-Plan Units Remaining
- Off-Plan Apartments – Estimated completion 2023
- At the centre of a £770 million Large-scale regeneration project changing the landscape of Bracknell
- Exclusive never seen before resident-only amenities
- 17.5% price growth expected by 2025 (JLL)
- Top location for London leavers – forecasting yields above 5%
Common Questions for UK Investing from Overseas
Can EU citizens get a mortgage in the UK?
Lenders will generally treat any country in the European Economic Area (EEA) the same as British citizens for mortgage purposes. This includes countries in the EU as well as Iceland, Norway and Switzerland.
There’s no expectation that Brexit will change this, despite Britain leaving the EU. Instead, anyone applying for a mortgage will experience the same credit checks that you’d normally expect. Although they’re by no means mandatory, a good credit record will help the chances of being accepted, as will registering to vote and having a UK bank account with direct debits.
Can I buy property in the UK as a foreigner?
The short answer is, yes. Overseas buyers can purchase UK property even if they do not live in the UK, although there are several considerations to take into account.
Buying UK property is always much easier if the investor is a cash buyer, as this circumvents the need to apply for a mortgage or take on additional borrowing.
In terms of lending, a growing number of British mortgage lenders are more likely to lend against a property if the recipient intends to use it for Buy-to-Let. While in the past this was typically provided by more specialist lenders, as the trend has taken hold we’ve seen a much broader range of products across the board.
This means that in the normal market, expat mortgages are also more common – provided you’re dealing with a specialist lender. It’s always best to shop around the market to ensure you’re getting the best product for you.
Investing in the UK also has a number of unique elements and costs that need to be considered, such as Stamp Duty Land Tax and other specific tax implications.
Can I use rental income to qualify for a mortgage in the UK?
Most lenders have tight policies around using rental income to qualify for a mortgage and although it’s possible, it can be more difficult for landlords that choose to take this route if that is their only source of income. Lenders will typically want evidence of enough rental income to cover the mortgage – typically this will be rental income that is 125%+ of the mortgage repayments.
Usually, lenders will want to demonstrate through market research that the rental values are correct and will use desktop valuations and research to do so – evidence of rental income will also support your mortgage application. Bear in mind that any income you do need to prove will need to be through official channels – such as self-employment accounts – and not simply shown on bank statements.
BTL Mortgage criteria does vary from lender to lender and as you’d expect, some vendors are more lenient with demonstrating past performance. If you’re purchasing a Buy-to-Let property for example, rental income is more typically accepted, especially if it’s being provided by a broader portfolio.
Can non-residents get a mortgage in the UK?
There’s a common misconception that non-residents can’t get mortgages in the UK but the opposite is true. Non-residents can freely get mortgages for a UK property, although it can be a longer process than domestic buyers.
In terms of securing finance, many international investors will benefit from the wider outlook that a specialist partner can offer over mainstream organisations – offering better interest rates and more favourable terms.
The biggest difference between applying for a domestic or international mortgage as a UK resident and a non-resident is, as expected, the time it takes to complete the process. While domestic investors could potentially complete the process in a month between application and completion, international investors will generally take a little longer – between 2 and 3 months on average.
As confidence in the market grows, specialist lenders will also usually start offering more ‘suitable’ expat mortgages, typically delivered as interest-only with specific rates and conditions.
Do foreigners pay Stamp Duty in the UK?
Unlike other tax considerations, Stamp Duty Land Tax (SDLT) is payable by everyone – no exceptions and no personal allowances regardless of whether you are a UK resident or not. Because SDLT as a term is relatively unique to the UK it doesn’t mean it’s unique to purchases, in Germany it’s called Real Estate Transfer Tax, in the USA – Local Customs and in Singapore SSD – whatever the country term is it can catch-out many non-UK residents so it’s important that they consider this in their planning.
Anybody who already owns a residential property, or even has a share in a residential property, across the world, is required to pay a slightly higher rate of SDLT, providing the share is more than £40,000.
Paying Stamp Duty is the responsibility of the buyer. While it’s possible for you to do it yourself, it’s typical that the solicitor will arrange the payment of the Stamp Duty during the wider process.
Has Brexit affected the UK market?
Brexit has played a huge part in the wider UK market since the vote in 2016. After half a decade of incredible growth for the South, the Brexit vote appeared to flip the script – the popular London market declined and regional cities in the Midlands and across the Commuter Belt saw broad increases.
This has meant over the last four years, Birmingham has led the way for UK growth and thrived as an affordable market, despite rising uncertainty.
The situation appeared to come to a head at the start of December last year, as the announcement of a General Election (GE) and continued Brexit uncertainty created a much more volatile market. That said, since the results of GE 2019 and the adoption of a firm Brexit stance, UK property has enjoyed a ‘Boris-Bounce’, with prices increasing and regional cities continuing to forecast exceptional growth.
While the Coronavirus pandemic largely overshadowed any Brexit impact, the initiatives put in place by the Government have largely sustained the market over the short-term.
Over the long-term, it’s difficult to say how Brexit may affect the market but right now UK property outperforming many other sectors.
How long does buying a property in the UK take?
Buying a property in the UK can vary – it all depends on how long your search takes, the type of property you’re looking to buy and how long the administration process takes.
For example, provided the process goes as smoothly as possible, MoneySavingExpert predicts that the process could take up to 14 weeks. This accounts for:
- Finding the property, researching the area and putting an offer in: 6 weeks
- Legal matters, surveying and exchange: 4 weeks
- Completion, exchange of contracts, keys and deeds: 4 weeks
Now take Off-Plan Property as an example. Due to the nature of the purchase, this will typically take a lot longer as the property has to be built beforehand. While this offers unique benefits, it obviously means the process is spread over a wider timeframe. With Off-Plan purchases from overseas, buyers will typically exchange contracts well in advance of completion, depending on build times, with completion and handover coming much later. Good developers supporting international or overseas purchases will support clients with mortgage applications ready for completion, guiding them through the process at each step.
If you are purchasing completed developments delays can usually be mitigated by performing due diligence and research prior to each stage of the process. By having the right partners in place, buyers can make the entire process more efficient, especially important for overseas investors that will be investing remotely. Remember that the UK has strict anti-money laundering (AML) requirements so getting basics ready such as Proof of Identification, Proof of Address and Proof of Funds ready in advance can be really helpful in speeding up the process.
What are the pitfalls of buying property in the UK as a foreigner?
The main pitfalls that impact overseas buyers are the financial implications associated with any purchase that is unique to the UK market. While cash buyers will generally have an easier time as they don’t have to apply for lending, tax considerations can still be an issue if not properly prepared for.
In terms of taxation, a cost unique to the UK that needs to be considered is Stamp Duty Land Tax. Similarly, depending on where you’re investing from, double taxation could be an issue, where you’re taxed by the country you’re a resident and the UK. This is mitigated by a ‘double-taxation agreement’.
Depending on whether your country of residence and the UK has a double-taxation agreement, you can apply for either partial or full relief prior to being taxed or a refund after you’ve been taxed.
Each agreement will set out the country you pay tax in, the country you apply for relief in and the amount of tax relief you’re eligible for. Be sure to research this thoroughly prior to making your investment. You can learn more about double-taxation agreements here.
While these are all challenges that can be easily solved, they do require a degree of proper planning and research beforehand. It also helps to have a trusted network of partners in place that can assist with any queries.
By properly understanding the financial impact of property investment in the UK, as well as the associated costs, overseas investors can plan ahead and ensure a thriving investment that can easily be ‘hands-off’, delivering just the benefits that come with a prime investment.
With JLL research showing more than half of UK residential property investments now originate from overseas, it’s clear that the stability and ROI the UK market can offer is attracting foreign investors, a trend that doesn’t look set to slow-down any time soon. The UK is firmly at the top of investor wish lists across the globe in 2020.
What is the Non-Resident Landlord Scheme?
The UK Non-Resident Landlord Scheme (NRLS) is how HM Revenue & Customs (HMRC) collects tax on rents from property owners who spend most of the year living overseas.
If you spend more than 6 months outside of the UK – regardless of your tax residence – you’re required to sign up to the Non-Resident Landlord Scheme.
Fundamentally, being a part of the NRLS means landlords can receive their full rent without deducting basic rate income tax immediately. While tax obligations are still in place, it can be done during a self-assessment, which can help cashflow planning.
If a non-resident landlord is not part of the scheme, letting agents (or even the tenant depending on the situation) are required to deduct at the basic income tax rate of 20% as soon as they receive the rent.
To sign up to the NRLS, complete the online application form through the Government Gateway or download the postal form.