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A temporary property stamp duty cut, designed by the UK government, to boost the housing market is likely to attract Middle East investors, according to consultancy Knight Frank.
The threshold at which buyers start paying stamp duty, a form of property tax, for residential property in the UK has been lifted from £125,000 (576,961 dirhams) to £500,000 (2.3 million dirhams).
According to Knight Frank, the change, effective immediately, will certainly be very welcome news to Middle Eastern property investors that are synonymous with UK property investment, particularly in and around London.
Henry Faun, Partner at Knight Frank Middle East, said, “The announcement will provide a welcome boost to property transactions across the UK property market. Interest and activity levels from Middle Eastern parties in the UK has recently seen an upsurge and the recent SDLT changes will make the buying of build complete property that much more attractive in the coming months. Middle Eastern purchasers who may already be liable for the second home, higher rate additional 3% stamp duty, will still be required to pay the surcharge on the full property value, though they too will benefit from the raised nil rate band.”
“Moving house has a multiplier effect on the wider economy to the benefit of businesses of all sizes. Gulf based clients already benefit from an attractive exchange rate, this will add an additional lift to their buying ability in the UK,” Faun added.
The UK Chancellor commented that the government pressed ahead with this decision in order to stimulate more deals in the market, encourage people to move home and support jobs, both nationally across the UK, but also from global real estate purchasers.
This recent stamp duty announcement comes off the back of news that the number of offers accepted by sellers hit a record level in June, in a further sign that traction has returned to UK property markets since the lockdown was lifted.
The figure was 46 percent higher than the second highest month on record, which was March this year, underlining how the property market has picked up where it left off before the Coronavirus pandemic struck.
“A large number of buyers registered their interest after an eight-week lockdown but what’s happening is bigger than that,” said Tom Bill, head of UK residential research at Knight Frank. “Sellers are coming back in meaningful numbers and deals are being agreed at record rates. You can question how long it will last but right now the market is as robust as it has been in years.”
(Writing by Seban Scaria , editing by Daniel Luiz)
#Property #Middle East #Investments #UK #Real Estate
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