London realty presses credentials with UAE buyer

Dubai: There will be no waning in the wooing of UAE investors for prime UK property, and particularly those that fall within the coveted areas of prime London.

Hamptons International is mounting a roadshow here next week to press the claims of high-end properties in Central London, while Harrods Estates put up its own high-profile event in December. They will not be the only ones.

The UK Budget unveiled last month did not offer any jolts to foreign investors through steep hikes in stamp duties, as was feared in many quarters in the run up to the presentation. In fact, “The March budget was very supportive of the housing market — we, like most commentators, see this leading to a modest improvement in transaction volumes with some upward pressure on prices,” said Wahi Mohsen, head of UK residential sales at Jones Lang LaSalle Mena. “International demand has improved each year since 2009 in line with a growing market.”

Hamptons is testing these sentiments now. “With the pound weakening we are confident that we’ll see an increase in buyers from certain countries that are keen to capitalise on this advantage,” said Andrew Phillips, head of Central London sales at the realtor.

For UAE based investors, the dollar peg allows an 18 per cent discount currently on property acquisitions in the UK.

At the Dubai event, Hamptons will offer projects from two developers, Octagon and A2 Dominion. In fact, the latter’s Wharf Road scheme in Islington will be launched in Dubai before it is released to buyers elsewhere. Investors will have the opportunity to make a 10 per cent deposit option on the properties with the rest paid on completion.

Stamp duty

According to Iseeb Rehman, managing director at Sherwoods Real Estate, which has been marketing UK properties for some time now, “There is no difference in stamp duty charges for UK or foreign investors [following the latest budget]. Stamp duty will increase from 7 to 15 per cent for properties in excess of £2 million (Dh11 million) only for non-private person investors, such as corporations.”

The 15 per cent top duty also applies to residences valued at £2 million plus owned by collective investment schemes. However, “Some companies acting as trustees for a settlement and property developers may only need to pay 7 per cent,” said Rehman.

“There is currently no legislation on new duties that come into play for second investments.”

The absolute peak in terms of the proportion of international buyers having exposures in prime London was in the second/third quarter of 2009, with an estimated 70 per cent plus of all purchases.

Estimates, by Harrods Estates, place the average spend by GCC-based investors at £3.9 million per transaction during 2012, which is also easily the highest level since 2008. New patterns were also emerging as to who was buying what.

“In addition to their strongholds in central London locations, we are seeing a younger demographic investing in properties outside the golden triangle, as some commercial buildings are being redeveloped,” said Shirley Humphrey, director of Harrods Estates.