I have been noticing a lot of interest in UK property from Indians in India.
We have had serious interest from numerous parties, on a site we sourced for our client, and three of these are big players from the Homeland. They have made their money in India and are looking to spend it on UK property.
One of the parties we had agreed the deal with, had placed the matter in their lawyers hands. The lawyers were going through the conveyancing process and then suddenly the buyers decided to renegotiate mid-way through the deal. You analyse the commercials of the deal first and agree the deal, prior to placing it in lawyers hands, otherwise you will end up with some very high legal bills and no deal; and a very annoyed counter party. Of course, we promptly withdrew papers.
Another group from Bangalore, decided to set up a company here and appoint a CEO. The CEO had plenty of construction experience, but very little in the art of deal making and negotiation. I would imagine he spent £10,000’s on due diligence on the site, in order to come to the position of making a low ball offer, which of course was rejected at the outset.
Clearly, he was the wrong man for the job. Several months later we approached the company again to see if they were still interested, at which point I heard he had been relieved of his position. If you’re bleeding expenses in analysing deals but cannot close one, at some point you will be subject to the wrath of the owners.
In regards to prime central London property, research shows 22% of all purchases are done by Indians with an average spend of £1.7m. The increased interest from Indian property investors has not only come from private individuals but has also from institutions and developers from the subcontinent who have been buying up large tracts of land in the UK.
Despite two years of slower price growth due to tax changes, and the UK’s Brexit vote, the UK has remained attractive to international buyers as a safe haven, with the rule of law and proper title to property. A clean title is something we take for granted, however, this is not something you can assume when purchasing in the subcontinent.
So why the interest? For the private buyer, relaxed laws mean each individual is entitled to remit $250,000 per annum. If you are living in a family unit of four, this entitles you to bring in $1m per annum. And, one cannot underestimate the emotional connection and history Indians have with the UK.
India has become a more challenging place to invest in, with high loan interest rates and rising prices in the main urban centres, together with increasing geopolitical and economic uncertainty.
Also, the weakened sterling represents a 20% discount for foreign investors, compared with two years ago. Indian buyers have now become a dominant force in the market place. They have overtaken buyers from the Middle East who have fallen to third place.
The increase in Indian buyers, however, has been set against a significantly decreasing number of European investors following the decision of the UK to leave the European Union. Buyers from Europe have been adopting a ‘wait and see’ stance.
It seems Indian institutions are coming with a view of placing their roots here, and will in time become a force to be reckoned with. Watch this space.
Agony Agent is here to help!
Following on from last week’s article, here are more tips on getting your property ready for winter:
1. Secure your property
If the tenant will be away for a period of time over the winter months, they must ensure that the property is fully secure. Simple measures such as ensuring all windows and doors are locked will deter opportunist thieves, while setting a light on a timer within the property can be an effective additional security measure.
2. Check the gutters
Most good tenancy agreements have a clause requiring tenants to unblock gutters, and to pay the costs of removing any obstruction or the damage caused by any overflow.
3. Check your insurance policy
Most insurance policies and tenancy agreements state that the insurers and agent must be informed if the property is to be left empty for more than a specified number of days (normally 30 days). We as agents offer an “empty property check” for a small fee. If the property is vacant pending reletting, the insurance policy will require the landlord or agent to maintain minimum temperatures or drain the water system, and inspect the property regularly. Each insurer has different conditions – please check the policy carefully.
4. Check smoke alarms and carbon monoxide detectors
On 1st October 2015, a new law came into place requiring private landlords to install smoke alarms in all rented properties, on every floor of their property. Carbon Monoxide (CO) alarms are also required in any room which is used as living accommodation, and which contains a solid appliance e.g. wood burning stove or an open log or coal fire. A test is required on them at the start of every tenancy. The landlord is required to check that smoke alarms or carbon monoxide alarms are in proper working order on the day a tenancy begins where there is a new tenancy. If the tenants were in occupation prior to 1st October 2015, the landlord must still install the alarms. After the landlord’s test on the first day of the tenancy, tenants should take responsibility for their own safety and test all alarms regularly to make sure they are in working order.
For any further help or advice on this matter please feel free to contact our office.
Don’t forget if you have a burning question that needs answering then email me, and you may even get published in next week’s Agony Agent.