Brexit will deter overseas buyers, UK property investors fear

An independent survey of more than 1,000 UK-based property investors has found that 55% are concerned Brexit will push away international purchasers from buying UK property.

This, in turn, would weaken the market, the research commissioned by Butterfield Mortgages Limited (BML) claimed.

The survey also revealed that 82% believe foreign buyers play a crucial role in making the UK property market competitive, with 57% believing international property investment is vital for the UK economy.

Despite this, UK-based investors said they did want certain restrictions to be placed on those purchasing from abroad.

Some 66% want there to be an increase in the stamp duty payable by overseas buyers, while 58% favour the implementation of a cap on the number of properties a non-UK resident can buy.

Meanwhile, 55% believe overseas buyers should be stopped from buying houses at the bottom end of the market so they do not damage the UK’s affordable housing supply.

Last October, the government – then still led by Theresa May – announced plans for a further stamp duty levy on overseas buyers, originally rumoured to be as high as 3% before industry pressure reduced this to 1%. 

In February 2019, the Treasury and HMRC launched a consultation on the planned non-UK resident surcharge, which closed on May 6 2019. As things stand, feedback is still being analysed and it is not clear if or when the proposals will be introduced.  

“As the UK heads towards the Brexit deadline, the country’s ability to attract international investment is going to be hugely important,” Alpa Bhakta, chief executive of BML, said.  

“This new research highlights how many property investors are concerned that we may, in fact, be pushing away overseas buyers and in turn damaging our own real estate market.”

She added: “That said, it is clear that controls must be put in place to protect the interests of domestic buyers, whether that is a stamp duty surcharge or property cap for overseas buyers.”

Bhakta said that, ultimately, a fine balance must be found, as overseas buyers make a significant contribution to the UK economy through the purchase of prime properties, ‘simultaneously ensuring the top end of the market remains competitive’.

“They should not be pushed away too eagerly, nor made scapegoats as the UK struggles to address the bigger issue of a lack of affordable housing,” she concluded.