Market remains positive that SDLT surcharge will have minimal impact
Although a 2% stamp duty surcharge is now in effect for overseas buyers, which some have suggested will dampen demand among international buyers, commentators have suggested that the UK property market will remain strong.
James Bloom, director at Alternative Bridging Corporation, said: “Over the course of the last year we have seen the continued strength of UK property in the face of adversity and, with the success of the vaccine roll-out and confidence around the economic recovery, the outlook for the market looks positive.”
Bloom added that there were, therefore, plenty of factors to keep demand high among overseas investors, in spite of the increased costs.
He said: “These robust fundamentals will outweigh the increased cost of acquisition for overseas investors and we expect demand to remain strong.”
Vic Jannels, CEO at the ASTL, added: “The UK property market has been a hotspot for overseas property investment for some time, thanks to the robust legal system and continuing under-supply of housing, which of course underpins prices.
COVID-19 and Britain’s exit from the European Union were also factors that posed significant threat to overseas demand, and yet the impact of both have been minimal.
Jannels said: “Now that the dust has settled on Brexit and the vaccination programme is one of the most advanced in the world, there is little reason to expect anything other than ongoing demand from foreign investors even with the higher rate of stamp duty.”
Marios Theophanous, credit manager at London Credit, suggested that demand will likely rise among foreign property investors, even with the additional cost of buying in the UK.
He said: “The extra 2% SDLT surcharge is unlikely to be welcomed by overseas buyers, but we don’t expect it to dampen interest in UK property.
“In fact, the UK is becoming more attractive to overseas investors thanks to the ongoing potential for capital gains, and positive sentiment regarding the speed of economic recovery following the pandemic.”