According to deVere Mortgages, where 70% of enquiries come from foreign nationals or British expats, buyers based in the Gulf nations are now ‘piling into the market’.
Approximately 45% of the overseas enquiries dealt with by deVere are from British expats or nationals residing in Qatar or the UAE.
Kevin White, head of distribution at deVere, said: “There has been a 60% month-on-month uplift in enquiries from Qatar and the UAE. People based in these Gulf nations are now piling into the British property market.
“We attribute this rush-to-buy phenomenon to those who, quite sensibly, want to avoid being subjected to the extra levy. No-one wants to pay an extra 3% in Stamp Duty.”
From April, buyers purchasing a second property will be subject to a 3% Stamp Duty premium. The details of the policy have not yet been announced, but the government’s consultation closed to responses on the matter this week.
A recent report published by estate agent Cluttons predicted a mass exodus of foreign buyers from the Prime London market as nerves surrounding currency and tax fluctuations prompt potential investors to reconsider their plans.
White explained that while UK property remained highly sought after among expats and overseas buyers, he warned that there were extra hurdles that they would have to face.
“British expats and foreign buyers should know that they are typically deemed as ‘high risk’ by the vast majority of UK lenders. They are usually ‘red-flagged’ due to a lower UK credit rating as they have lived outside the UK, earned a different currency and worked for a non UK-based firm. This is often the case even for those who have substantial assets and/or a high, stable salary,” he said.
One major issue the government has consulted on in its paper is a Stamp Duty refund mechanism for buyers selling their original home within 18 months of buying a second property.
White explained that overseas buyers should consider ‘the pitfall of wasting money’ on higher rates and subsequential ability to reclaim tax within 18 months.
He added: “To avoid wasting time, effort and money, it is recommended that expats wanting to purchase property in the UK seek advice from advisers who have the relevant experience of cross-border financial matters, who will help them fulfil the criteria in an increasingly strict mortgage environment, and who have established relationships with the relevant UK lenders.”