Data from leading UK lettings agents including Frank Knight and Savills suggest that many of those investing in London’s buy-to-let market are foreign. However, a significant proportion are actually ex-pat British, looking to make a stable income to support their overseas life, or to have a stake in the UK property market for when they return.
But managing a property from overseas can be a challenge. Here are some key points to help make the process easier.
• Invest in a new-build. While London new-builds are more costly that older stock, the signs are that older properties are increasing in price more quickly than new ones. The real advantage to a new-build is that it usually comes with a 10 year guarantee – which means investors won’t have to pay for repairs as they would for an older property.
• Find a trustworthy letting agent that specialises in lets. Ensure they have the manpower and reputation for arranging viewings and renewals, checking properties, serving notice and dealing with maintenance issues – so you won’t be bothered while you’re overseas.
• Do thorough research before you choose a property. Consider how a house or flat may become more desirable in the future. For example, the new Crossrail development may, when it is finished in 2018, make properties near its terminals more attractive to high-paying commuters.
• Take out buy-to-let insurance for complete peace of mind
• Under the Non-Resident Landlord Scheme (NRLS), owners would be required to pay 20% in income tax on the rent they receive. Tenants who pay more than £100 per week would deduct the tax themselves.
• Get a good tax specialist with knowledge of domestic and overseas tax law.
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