London property investment guide for foreign investors

UK Housing Market: Forecast For the Future
Are you considering property investment in London’s most desirable locations? Here’s what you need to know.
London is a wonderful place to call home, it has been listed as one of the world’s best places to live and work due to its rich and diverse culture, status as a global hub. London offers a strong legal structure and resilience to market conditions. Whether you want to buy a property as an investment or as a place you will call home, you can rely on the professionals at Vogue Properties to help guide you in making your decisions – starting with the best locations and market prices and finishing with the design concept of your future home.
London is a city with 33 local authority districts known as “boroughs”, which were all officially created on 1 April 1965. Each borough has a distinct sense of identity providing a wide variety of investment opportunities and options for second homes. Some of the most well-known boroughs are as follows:
Bordering Surrey to the South, the London Borough of Wandsworth. However, it excluded the areas of Clapham and Streatham which were included in the London Borough of Lambeth. The Prince of Wales Drive development is a new project by St. William (part of Berkeley Group), located moments from Battersea Park and 1 mile from Sloane Square and a 5-minute walk from the new Northern Line Underground Station extension due to open in 2021.
Hammersmith and Fulham:
Another Inner London borough, Hammersmith and Fulham is spans West and Southwest London. It is the only borough in London with three football clubs: Chelsea, Fulham and Queens Park Rangers. The White City Living development is in the heart of West London, adjacent to Westfield, the biggest shopping mall in Europe. White City Living is a 2-minute walk from White City Underground Station (Central Line) and Wood Lane Underground Station (Circle Line, Hammersmith and City line). Marble Arch, Oxford Street, Selfridges and Hyde Park are all less than 15 minutes away.
Home to Wembley Stadium, one of the biggest landmarks in England. The London Borough of Brent is not just a residential area – it has lots of commercial and industrial land. The Grand Union development is located in Alperton, close to Wembley and with great connections into central London. You can enjoy a waterside piazza with cafes, restaurants, and a community centre at its heart. With 11 acres of landscaped gardens, riverside meadows and waterside pathways, Grand Union will be a unique destination to play, work and relax.
City of Westminster:
Like the City of London, the City of Westminster has city status as well as being classified as a borough. It includes the famous theatres and entertainment district of the West End, which also covers a part of Camden. The Marylebone Square development is an exclusive collection of 54 apartments, carefully selected boutiques and restaurants located in the heart of W1, one of London’s most prestigious postcodes. Oxford Street & the Bond Street underground is 5 minutes away with the open spaces of Regent’s Park to the North and Hyde Park to the South. The development is due for completion in Q1 2023 and combines traditional craftsmanship with 21st-century engineering, blending into its historic home with subtle modernity that enhances its surroundings.
Another magnificent development by one of the UK’s top developers, The Berkley Group, is located in the City of Westminster – West End Gate. Asquith House, a part of this development, is less than a 15-minute walk to both Hyde Park and Regents Park. West End Gate is a 1-minute walk to Edgware Road Underground Station, a 9-minute walk to Marylebone Underground Station and an 11-minute walk to Paddington Station. It is moments from the prestigious neighbourhoods of Marylebone and St John’s Wood.
The London Borough of Barnet, located in the North-West of the city, is the site of the decisive Battle of Barnet fought in 1471. The Beaufort Park development offers a choice of Studios, 1, 2, 3 & 4 bedroom apartments and penthouses. Each home is light-filled and fitted with contemporary details. It is only a 5-minute walk to Colindale London Underground Station on the Northern Line, 15 minutes from Euston station and central London.
Newham is a borough in the North-East of the city. The borough contains the Olympic Stadium and the Olympic Park built for the 2012 Games. After the London Borough of Tower Hamlets, Newham has the second most ethnically diverse borough in London. Evergreen Point is the first building to be released in the dynamic heart of TwelveTrees Park and is perfectly placed for access to West Ham Station. Fresh and modern, this new neighbourhood is just minutes from the City of London (Financial District), Canary Wharf, Stratford and the West End. It offers studios, 1, 2 and 3 bedroom apartments, all individually designed to meet high-quality standards.
Is it a good time to buy?
With the impact of COVID-19 and the Brexit transition on the value of the pound and borrowing rates, it is a very attractive time to buy property in London. If you have any questions or doubts about whether it is the right time to buy at all, what type of property to buy, and what the rates are – we are here to support you every step of the way. We partner with only the most reliable developers offering an extensive portfolio of properties to give you peace of mind and the highest levels of quality, whether you are buying to invest or to move in yourself.
What does it mean to own a property in London?
In the UK once you have purchased a property, your proof of property ownership can be found on a public register at the Land Registry. Registration proves the identity of the owner and their title to the property. The register also describes the type of property and what land comes with it.
What are the types of ownership?
When you buy a UK property, it can be freehold (i.e. you own it completely) or it may be on a leasehold, indicating that there is a time limit on your ownership. However, many properties (especially apartments in central London) have long leases of up to 999 years, which gives you virtually the same rights as freehold. In many cases, the freehold can be purchased, and the leasehold removed.
How much to spend?
The first thing you need to consider is the price – current property prices and historical property prices in your area of interest. The situation has changed due to the latest Covid-19 events. Nowadays people are looking for more private and detached houses, i.e., increasing the demand for properties outside the city which is making central areas more affordable. Nevertheless, the latest property market fluctuations will make your initial investment likely to see capital growth over a relatively short time. Other costs you will need to consider include:
  • Stamp Duty
  • Legal Fees
  • Valuation fees (mortgage)
  • Mortgage fees (if required)
Stamp Duty can be complicated depending on the value of the property and whether the buyer is resident or non-resident, nevertheless, our professionals are ready to support you in understanding the level of stamp duty you pay when buying a property.
The buying process?
  1. If you wish to buy a property, your offer is presented to the developer (seller) through the estate agent. They will want to know how your purchase is being funded, how quickly you want to buy and who your lawyers are (you’ll need to appoint lawyers to act for you in your purchase).

    Whether you are buying or selling a property in the UK, our trusted legal partners in London are able to offer a range of services based on your specific needs. Vogue Properties will assist you in a hassle-free journey through all stages of the legal acquisition of your property free of any extra fees.

  2. The developer’s lawyers draft a sale agreement – and when the terms are agreed by the developer and the buyer, copies are signed by both parties. Once the signed sale agreements (or contracts) have been exchanged between both parties’ lawyers, the developer and buyer are legally bound to proceed. At the time of exchange, the buyer will need to hand over a deposit to the developer via their lawyer.

  3. Completion of the purchase takes place on a mutually agreed date (which can be the same day as the exchange). The balance of the purchase price is settled on completion and the formal documents transferring the property are dated for the day of completion.

  4. At this stage, the buyer becomes the legal owner of the property, with the legal title deed, passed to them once the transaction is registered at the Land Registry. Stamp Duty land tax (see below) is payable to the Land Registry within 30 days of completion. This process will be carried out by the developer’s lawyer.
Let’s talk Taxes.
When buying a property in London and not being a UK resident, the buyer will need to own his or her property in accordance with the UK and relevant overseas tax considerations. Stamp Duty Land Tax (SDLT) is payable on all transactions, the amount payable depends on whether the property is residential, commercial, or mixed-use and is calculated on a sliding scale.
The non-UK resident SDLT surcharge will apply at a rate of 2% above the residential rates (including the higher rates for additional dwellings and companies, the 15% rate and the first-time buyers’ rates) on residential property bought by non-residents. This would be in addition to the existing 3% higher rates surcharge which most foreigners already pay because they already own one or more residential properties overseas. So, SDLT for overseas buyers will be at a top rate of 17% of the purchase price.
This will be either a flat rate of 17% in the case of the existing 15% higher rate on companies buying a dwelling or in other cases, on the top slice of the purchase price above £1.5m. (LINK)
Capital Gains Tax
If you’re buying a property and it gains in value, you will have to pay Capital Gains Tax on the amount by which it has increased in value when you sell it. New rules from HM Revenue and Customs on capital gains tax in the UK came into effect from April 6th 2020. Capital Gains Tax for residential property is charged at the rate of 28% where the total taxable gains and income are above the income tax basic rate band. Below that limit, the rate is 18%.
For non-residential property and other assets, the rates are 10% and 20% for individuals. (LINK)
If you intend to buy a property in London – either for yourself, your family or as an investment, our professionals at Vogue Properties will be happy to lead you through the whole process. We will help you find the development that you will benefit from additionally from a rise in the property’s capital value over time. Get in touch with us via phone +971 55 680 18 88 for Dubai, +44 75 11 1 77 888 for London or via our contact page.
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