US expats are increasingly stepping onto the housing ladder in the UK, as the weak pound makes property more affordable.
There are 200,000 Americans living in the UK, notes Expat Forum, and a growing number of them are moving to take advantage of the impact of the EU referendum. Research from chartered accountants Bambridge shows that there has been a threefold increase in Americans making notable investments in the UK since June 2016, with amounts ranging from $250,000 and $500,000. The vast majority of these transactions are to buy British homes for those who have otherwise been renting in the UK, or for those who own a home seeking an additional property for investment purposes.
“Sterling’s abrupt fall means that for Americans living in the UK, British property is suddenly on sale. Whether they’re making a permanent home here or an opportunistic investment, buying a UK property now has a compelling logic,” says Alistair Bambridge, a senior partner at the firm.
The pound recently hit a 31-year low against the US dollar, Currencies.co.uk tells the Financial Times.
“A big swing in the market naturally encourages people to move,” Jonathan Watson, associate director at Currencies.co.uk, explains. “The US election is absolutely another factor.”
Expats aiming to invest in UK property or remain more permanently in the country, though, should be aware of the tax implications of their transactions.
“US citizens must complete a US tax return every year wherever they are in the world. It’s essential that those making investments in Britain report it correctly to both the UK and US tax authorities,” explains Bambridge. “Double taxation agreements exist between London and Washington to protect American citizens living in the UK from being taxed twice, but failure to properly declare investments they make here can result in a large fine in the US.”