Of the several different types of buyers you can sell property to overseas buyers are an interesting niche. We’ll look at the ins and outs of selling to buyers from overseas here.
Overseas buyers, for better or worse, are a big force in the UK property market. Overseas buyers spent £3.3 billion on London prime property in 2020 alone and the number of overseas landlords has increased by 20% in five years. So overseas buyers can be an important source of sales for sellers, agents and others in the property industry.
The UK market is pretty much wide open to overseas buyers who can buy here with very few limits. Many overseas buyers see the UK as an attractive and safe place to buy or invest in property.
Overseas buyers in the UK are usually affluent. They are sometimes HNWIs or high net worth individuals. They are often willing to make strong offers, above what local buyers might offer.
Overseas buyers are often cash buyers. So they are able to complete sales fast and there is no chain.
Overseas buyers are often buy to let investors .... and sometimes ‘lock and leave’ investors who use property as a way to park money. So they may be in the market for several properties.
Overseas buyers often aren’t impacted by the same things that impact UK buyers. For example, when interest rates, taxes or the cost of living rises this may reduce demand from UK buyers but may make no difference to overseas buyers. Factors such as fluctuations in the exchange rate or economic conditions in their own country do impact them however.
Overseas buyers can be offered extra services, such as financial advice and property letting and management. So they can offer extra revenue streams for agents.
Overseas buyers aren’t usually aware of local market conditions and local pricing levels.
Overseas buyers usually aren’t aware of how things work in the UK property market. For example as regards offers, surveys, finance and conveyancing. This may hamper progression of the sale in some cases.
Overseas buyers may be subject to restrictions on buying abroad which apply in their own country, and it may affect their tax position.
Extra UK taxes may dampen demand from overseas buyers. For example, as well as extra tax payable on additional homes a 2% SDLT surcharge (England and Northern Ireland) applies to buyers who are non-resident in the UK. And the rules for when it applies are quite complex.
What you can do to tap into the overseas buyer market
Traditionally overseas buyers are most active in the London market. However, as prices in London have risen overseas buyers have become more active in the regions too. If you are interested in pitching your property to overseas buyers there are a number of things you might do to sell into this market.
Positively promote your property to buyers in other countries. London has many attractions to overseas buyers but it’s often the case that overseas buyers buy in London because London is the only place they know. The more they know about other UK cities and regions (and especially what good value they can be) the more likely they are to consider buying or investing in them.
Look at how you can promote your property in other countries, such as by listing on portals and property advertising sites in other countries.
Consider whether providing literature in other languages and a service in other languages would be possible and worthwhile.
Offer extra help, advice and information over and above what you would normally need to offer to UK buyers. Overseas buyers often need more local market information and help with the buying process. They may also appreciate introductions to specialist advisers who can help them with their specific legal and tax issues.
Lastly, don’t overlook sales to the expatriate market too. Those originally from the UK can be a useful source of sales. Expatriates may be looking for a buy to let property, a holiday home or a place to live when they eventually return to the UK. Expatriate buyers are not exactly the same as overseas buyers but selling to them may have similar pros and cons.