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Expats jump on London property bandwagon

26th September 2011

As foreign investors continue to snap up properties in London, more expats are starting to follow suit.


Many expats see London property as a safe investment 

By Justin Harper

Source:  Telegraph 20 Sep 2011

The London property scene is the world’s most international city market, with buyers from Asia now starting to jostle with Russia and the Middle East as the biggest overseas property investors in the capital.

Many are buoyed by strong currencies in their own country, compared to a weak sterling. Plus, London is viewed as a “safe” and healthy market for both rental yields and capital appreciation.

All this positive news has encouraged more expats to consider buying property back in London, where prices have gone up seven per cent in the last 12 months and are expected to climb further.

Julian Sedgwick, director of international residential sales for Savills, said: ‘We are seeing an increase in the number of expats coming back into the market. While the exchange rate is working in their favour, many also want to avoid the uncertainty of the stock markets and put their money into something less volatile.”

Knight Frankholds exhibitions for UK property in Singapore, Hong Kong, Kuala Lumpur and Shanghai. Its head of UK residential research Grainne Gilmore, added: “An expat earning Singapore dollars, for example, and buying in London could enjoy a 20 per cent discount because of the weakened pound.”

That’s not the only advantage an expat can enjoy. British expats are also likely to know the best parts of London to buy in and the areas to avoid, unlike Asian investors.

They can also enjoy advantages over other Brits.

Mr Sedgwick added: “UK property developers often give incentives when selling to an Asian audience such as rental guarantees and property price discounts, which aren’t offered to UK buyers. So this is another area expats could benefit from.”

One further advantage comes in the form of capital gains tax (CGT). Singapore-based Martin Rimmer, tax manager (Asia Pacific) forThe Fry Group,said that CGT is no longer payable if you are non-resident for at least five years.

But you don’t need to wait five years to enjoy the exemption.

He explained: “Someone leaving the UK remains liable to capital gains tax on worldwide gains throughout the tax year of departure. However, from 6 April following departure they become exempt, and most gains no longer need to be reported to HMRC. That exemption is finally secured once the taxpayer has been non-resident for five complete tax years.”