As the UK heads to the polls this week on 4th July 2024 to elect a new government, the outcome could significantly impact Middle Eastern real estate investors. Barratt London has analyzed the manifestos of the two major parties, highlighting their potential effects on property purchases in the UK capital.
Conservative party policies
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Reduce both legal and illegal immigration, proposing caps on working visas and increased income requirements for foreign nationals wishing to bring their families to the UK. However, these measures are unlikely to impact high-net-worth individuals or those purchasing holiday homes or properties for relatives studying in the UK.
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Increase housebuilding by fast-tracking planning permission for brownfield developments in large cities, an area where Barratt London specializes. This could lower property costs and increase availability.
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Permanently raise the threshold at which first-time buyers are exempt from Stamp Duty to £425,000, including overseas buyers.
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Implement leasehold reform, capping ground rents at £250, and facilitating commonhold tenure for apartment owners.
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Pass a Renters Reform Bill, which will enhance tenant security by prohibiting no-fault evictions.
Labour Party policies
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Build 1.5 million new homes over the next parliament and focus on regenerating brownfield land for development.
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Add a 1% Stamp Duty on residential property purchases by non-UK residents. This increase would mean that investors owning a home elsewhere would face rates of 6% on the amount under £250,000, 11% on the portion up to £925,000, 16% on the portion up to £1.5 million, and 18% on any amount over £1.5 million. For example, this would add £5,000 to the cost of buying the average London apartment priced at £500,000, although rates remain low compared to global standards, such as Singapore's 60% tax.
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End leasehold tenure entirely, moving to commonhold as the default for apartments.
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Regulate ground rents and maintenance costs, which could benefit city flat investors.
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Abolish Non-Dom status and introduce a points-based immigration system for those wishing to live in the UK.
Expert commentary
Stuart Leslie, International Sales and Marketing Director at Barratt London, comments: “Overseas investors might be nervous at the prospect of a change of government, but it’s important to remember that London property has remained a secure long-term investment through six General Elections and three different shades of Government since 2000.
Those who bought the average house in January 2000 for £132,705 will find it now worth around £499,663 – a 277% increase, clearly demonstrating that whatever the political party at the helm, investing in UK property continues to be a secure and reliable investment, especially in the regeneration areas that Barratt London specialise in, which increase in value even more strongly.”