Are overseas buyers also taking advantage of the current stamp duty holiday?

Posted 10th Aug 2020 in Property

The surge in house buying following the Chancellor’s announcement that until the 31st March 2021 stamp duty charges will not apply before a purchase price exceeds £500,000 has been well documented.  It has also provided the beleaguered UK housing market with some much needed good news.

However, new studies on current mortgage search trends would indicate the interest in buying residential property in the UK is very much international as buyers look to take full advantage of the potential stamp duty savings.

Data recently released by several industry sources shows that the number of searches for potential lenders being made by advisers looking to arrange mortgages for their overseas clients has risen by 146%.  Terms like ‘visas’’ ‘expats, ‘foreign income’ and ‘outside the UK’ had become the most popular by the end of July (the Chancellor’s statement was released on the 8th July).

During the same period it also appears that the majority of enquiries related to a visa or an application from outside the UK were being made in relation to buy-to-let properties.

It’s important to note that while the so called ‘stamp duty holiday’ has definitely influenced the market, it is not the only factor encouraging overseas investors to invest in the UK housing market.

The pound has weakened due to Brexit and the COVID pandemic which will make potential purchases more attractive in some countries around the world.  Meanwhile local political concerns are also increasing interest in the UK with demand from Hong Kong-based buyers definitely being influenced by the current political unrest in their country.  And, this trend could well grow massively if the Government’s plan to offer citizenship to 300,000 British National Overseas (BNO) passport holders becomes a reality.

And investors will also be heartened by the fluidity in the UK’s financial services even if they have little if any credit history.  Lending criteria is changing on an almost weekly basis and lenders and advisers are working together to make sure potential borrowers find the deals they need to build their property portfolios.

The only people who are almost certain not to benefit from the sudden increase in overseas interest in UK – and, more specifically, London – property are first time buyers.

It is already an almost impossible struggle for them to get even close to buying homes in the areas they want to live in and if the current international demand for UK-based investments continues, they will continue to be priced out of the market.

If you are planning to move and would like to discuss stamp duty or anything else relating to the sale of your current house or the purchase of your new home, please email me at [email protected] or call me on 0208 515 6600.