There is a good pent-up demand for UK property among UAE investors. They are keen to conclude deals before April 2021 due to a subsequent change in stamp duty regulation for non-UK residents, according to real estate consultancy Cushman & Wakefield Core.
“We foresee the realisation of underlying and pent-up UAE investor demand as UAE buyers look to secure their purchases before the start of April next year and capitalise on this window of opportunity of multifaceted savings,” said Alex Casaki, head of London Desk at Cushman & Wakefield Core.
While travel restrictions have limited the opportunity for UAE buyers to physically view properties for most of 2020, Casakai said “significant demand” comes in the wake of “a rise in enquires in early Q1 2020 following the UK’s elections results in December 2019”.
Some of the UAE’s major developers such as Damac Properties have invested billions of dirhams in the UK’s property market.
“This is further compelled by a sense of urgency with the upcoming increase in purchasing costs for non-resident buyers and signs of recovery in the pound that had considerably weakened in recent years due to political and economic uncertainty,” he added.
With travel restrictions in place since March 2020, Casakai said there was a steady increase in demand from UAE buyers as they identified opportunities via virtual viewings. However, most buyers, particularly those looking for properties at higher price points (above £5 million), were reluctant to conclude purchases virtually until changes in travel regulations permitted them to view these prime properties in person.
With UAE buyers awaiting to conclude purchases after physical viewings, Cushman & Wakefield Core expects to see a release of pent-up demand as buyers look to transact prior to April 1, 2021.
“UAE buyers understand that prime London properties are currently priced nearly 20 per cent lower than peak 2014 prices. They are also aware of the window of opportunity to capitalise on further savings by finalising transactions before the end of the stamp duty holiday on March 31, 2021, which coincides with the introduction of a two per cent SDLT (Stamp Duty Land Tax) surcharge for non-UK resident buyers,” he added.
