Investments in UK for UAE Expats

A guide to buying properties in the UK if you're a UAE expat

Posted on

30 July 2019

| Last updated on 19 January 2020

by Clarice Awa

How to Invest In A UK Home When Living in UAE

Photo credit: Tierra Mallorca

Here's everything you need to know about buying UK property if you're a British or foreign expat living in UAE

If you're an overseas investor, you may be thinking of buying homes in the UK while the sterling pound is weak and the property prices are stagnating.

It isn't hard to see why UAE expats are watching and considering investing in the many British property opportunities. It's a financially rewarding business, producing a consistent income if you're opting for buy-to-let housing, and for individuals and families working and living in the UAE, it grants you the security of a home when you want to permanently return to the UK.

While at first glance, the process of investing in UK property while in Dubai seems complicated, it's not a complex ordeal when the procedures and steps become straightforward and seamless.

Let us guide you on how to invest in UK property from the UAE.

What are the UK properties for UAE expats?

These are the UK property investment opportunities available if you live and work abroad:

You may choose between investing in freehold property - owning both the land and the structure that sits on it, or leasehold property - you own the property for a fixed time that's been agreed with the landlord. These are typically apartments, or houses bought through shared ownership plans.

You may become a long-distance landlord and purchase a buy-to-let property (buying a property to rent it out). These are great means of providing financial security for later in life,

If you fancy investing in property development, you should be ready to know a developer and be prepared to invest a sizeable amount of funds into a single opportunity. You'll be earning a return on your investment either through a future resale of the dwelling, or a through rental income, or both. Investing in a property development plan can have risks involved, such as the property not turning out as it may have been promised or initially planned, the developer going bust, and how the neighbourhood it'll be built in might transform into overtime.

How to start investing in UK property from UAE

Preparing for the investment process

Identify what kind of unit you want
These are UK properties - houses, apartments, buy-to-let, development plans, etc.

Research on the best locations to suit your needs
Research on the location. Southern regions have lower property demand but a strong supply, whereas properties up North have higher demand but a lower supply of residential units. You'll want to know whether you want to generate income, to build a long-term family home, etc. We have a list of recommended places to invest property in - more on that later.

Calculate your income and expenditure in an average month
It will depict if you can afford the costs of investing in UK property.

Work out what capital you have available
This can include any savings accounts, premium bonds, shares, other investments, etc. Find out what returns or interest your capital is paying.

Check if you're eligible for a mortgage
And how much you can afford to pay as a deposit. Most lenders require at least 25% of the property's listed value, but there are some who'll accept much lower deposits.

Get ready to travel between the UK and UAE
Whether you are a non-UK resident or British expat who's working and living abroad, you may encounter tough identity checks. Be prepared to travel between the UK and UAE a bit to confirm your identity in person.

Choose between an agent and a property finder
Estate Agents based in the UK are the most convenient for expats overseas and are typically the first to be called. They can be experts on a specific property market such as residential or commercial properties. Estate agents work on behalf of the vendor and work to get the best (highest) possible selling price for a unit. Investors may find that it can be quite tricky working with them because the agent may be reluctant to give the true value of the property in the current market.

Property Finders (Buyer Brokerage in the US, and Buyer Advocacy in Australia) are companies or individuals who represent the investor in a property transaction. They work on your behalf and they aim to give you a clear and straightforward idea of the current property market, and most will counsel you in dealing with it.

Regardless of which you choose, you'll want to tell them as much as possible about your personal motivations and requirements for investing in UK property. The more transparent information you give, the more you'll be able to build your knowledge on the buying system, macro and micro geography, issues you may find regarding the property build such as those with mortar, and more.

It'll help you establish the most satisfactory deal for your investment.

The buying process

1. Choose a property

2. Pay the reservation fee
The reservation fee will usually be between £ 2,000 - 5,000.

3. Make an offer
Make an offer and if it has been accepted, you will need to hire a solicitor to transfer the property to your name.

It's worth noting that if you have taken out a mortgage on the unit, the lender will usually want a valuation test completed to check that your property investment is worth what they're loaning you.

If the valuation sees any potential problems, you might have to cut down your offer.

4. Exchange contracts

Your solicitor should inform you when they're done with all the important investigations and searches. Then once the mortgage lender gives you a firm offer, you're ready to exchange contracts and by then you'll be committed into investing in the property.

5. Pay the deposit
As mentioned, it's usually 25% but it can be less for some.

Recommended UK residential areas to invest in

London

Much of the units in London are great investments. Influenced by the last few years of political uncertainty, properties in London has been seeing falling prices for as much as 25%. A fantastic location for those who don't want to part too much from the UAE city lifestyle. Very popular for business professionals and young adults.

East Midlands

Edwalton, Nottingham, and West Bridgford are ideal for families and the areas pull in many law and medicine professionals. The suburbs have plenty of mum-and-pop, independent shops and eateries. The house prices, however, have climbed up over the years.

Nottinghamshire, Newark-on-Trent, and nearby locations are rapidly becoming popular for commuters because of the convenient road links and trains to London's Kings Cross station.

The Cotswolds

A great place for investing in holiday lets. Towns across the Cotswolds such as Bath, Tetbury, and Cirencester provide a good income stream for tourism.

South Cerney

Properties around South Cerney lakes are attracting buyers because of the picturesque locations.

West Country

Investors looking for buy-to-lets in West Country properties can expect a high demand of residents in the form of university students, relocaters, and retirees. More and more student accommodations are being built to meet the increase of UK and foreign students. Many students and young, graduated professionals are always looking out for affordable housing.