Can Foreigners Buy a Property in Nottingham

Despite the challenges posed by COVID-19 and Brexit, international investors are upbeat and continue to express interest in the UK market.
Nottingham, which is in the East Midlands, might not come to mind when thinking about investing in real estate. Many individuals are unaware of Nottingham’s potential because cities like Liverpool, Manchester, Birmingham, and London predominate investors’ thoughts.
Nottingham real estate has really experienced some of the most notable price rise over the previous five years and currently holds one of the top spots on several growth tables.
Before purchasing an investment property anywhere in Nottingham however, international investors may have some important questions to ask.

Is Buying Property in Nottingham a Good Investment?

Nottingham, a lively small city, has had some truly amazing growth in recent years. After examining trends and data from numerous important sources, Nottingham ranked among the top areas to invest in UK real estate by the end of 2022.

The city’s key assets are its recent decade of rapid capital growth and its potential for continued long-term return increase. Nottingham continues to have outstanding tenant demand and a growing creative industry that is drawing waves of graduates from both within and outside the city.

There are many reasons why buying property in this East Midlands city is a good investment, here is a list.

There is a thriving start-up scene in Nottingham.

Nottingham is a very vibrant city with a strong creative industry at its core. A solid business support network, access to a talent pipeline, and reasonably priced commercial rents make it a hotspot for start-ups and scaleups in addition to fashion design, film, gaming, and TV production.

Nottingham’s Creative Quarter, which combines coworking spaces, company ecosystems, retail, dining, and living spaces in a cutting-edge and future-focused core, is the centre of its digital and creative economy.

Young professionals are becoming more and more drawn to Nottingham because of the opportunities for cooperation, the talent, and the resources to start firms easily and affordably.

Nottingham’s healthy and prospective economy

Nottingham is a particularly appealing place to invest in real estate because of its promising future and burgeoning economy.

With a GDP of £24.9 billion and a growth rate of 1.7 percent, Nottingham ranks seventh in the UK among top 10 cities with growing economies, outpacing those of Birmingham, Liverpool, and Sheffield.

Nottingham’s economy is expected to rise by 2.1 percent annually between 2021 and 2023, securing Nottingham’s place among the UK’s fastest-growing cities.

In addition to being a desirable place to live, the city’s economy is strong and continually expanding, and job growth is stronger than that of other places like Leicester and Derby. Nottingham was one of the top achievers in the UK for the first three months of 2020 in terms of job creation, which brought in a surge of people looking for rental property.

Looking ahead, Nottingham’s economy is anticipated to increase by 14.8% by 2027, maintaining its position as the East Midlands’ fastest-growing economy. (For context, Leicester, another economy in the UK that is growing, will lag behind with 12.9% growth over the next ten years.) This implies that any investment property will probably yield a healthy return on investment over the next ten years, from the perspective of a real estate investor.

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Business in Nottingham is thriving and welcoming.

Numerous businesses from a variety of industries continue to be drawn to Nottingham by its strong business community.
Nottingham has been chosen as the national headquarters of more than 50 well-known companies, including:

Pendragon
Langley Holdings
Boots, UK
Wilkos
Experian
Capital One
Centre Parcs
Speedo

High-net-worth sectors are also contributing to the city’s economic growth, which increases its attraction to young professionals who are more likely to look for rental properties, which is good news for Nottingham’s real estate market.

Another excellent thing is that these companies frequently work with Nottingham’s universities, which makes them even more appealing to the city’s more than 60,000 students.

Over 126,000 people are employed by the financial and commercial services sector, which is also where companies like HD decisions and TDX group are based. One of the UK’s administrative hubs, the presence of organisations like KPMG, Deloitte, and Browne Jacobson increases the city’s attraction to organisations of a comparable magnitude.

These data also point to a steady, expanding rental market with a significant potential for great returns in the upcoming years for you as a potential property owner.

Nottingham Has Affordable Housing and High Rental Returns

Nottingham experienced the fastest annual growth rate of 5.2% in UK cities for house prices in 2019. Nottingham has made significant progress in recent years and is now a significant investment location. Similar to Liverpool, this city has a few areas with high yields of about 9%.

The average price of a home in Nottingham is less than the average price of a home in London, Cardiff, Oxford, Southampton, and many other UK cities. Additionally, it is £97,000 less expensive than the average house price in the UK.

Property buyers in Nottingham should anticipate yields of 6.65% on average due to the city’s cheap property prices and rising rental costs.

The rental market in Nottingham is also interesting. The city is currently experiencing a housing shortage, which is driving up rates. Rents are increasing; it is not ideal for tenants but it’s good news for investors. Henson & Stanley has a trusted team of advisors for overseas property investors. We have dealt with foreigners from many regions: China, Bahrain, Nigeria, and many other African and Asian countries.

Future Economic Growth Potential is High

The potential for future expansion of the city must be taken into account. Things are looking exciting for this city as it goes through a period of intense economic revitalization.

A £2 billion renovation of Nottingham City Centre’s Southside is now under construction. The project includes the renovation of the central library and bus station, as well as the construction of a college campus called City Hub, Grade A office space, and a shopping centre. The city’s infrastructure has already received a $1 billion investment, including one of the UK’s greenest bus networks and light rail trams for congested-free travel and commuting.

The high-speed rail network known as HS2 will also be advantageous to the city. Travel times to London will be further shortened, and the rest of the UK will be brought even closer, thanks to the East Midlands Hub facility planned for Toton on the city’s outskirts.

Due to growing prices, new rental opportunities, and capital growth returns, these development projects are expected to have a favourable impact on all aspects of Nottingham’s economy, including business growth, an influx of young professionals, and improved confidence for property investment.

Also, according to Savills, home prices in the East Midlands are anticipated to rise by 4% in 2022, 3.5% in 2023, and an extra 3% in 2024. In conclusion, the East Midlands alone should experience a 16.5 percent increase in housing costs by 2026.

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Nottingham’s Student Housing Market Is Strongly patronised by Students

The University of Nottingham and Nottingham Trent University are two top-tier universities located in Nottingham. The institutions, which are renowned across the world for their research prowess, have contributed to the city’s expertise in industry, technology, and healthcare.

These two universities are well-known, which has created a vibrant student community. The city has more than 60,000 students, many of them international. The University of Nottingham has one-quarter international students.

A buy-to-let property targeted towards renting to students can be a profitable investment because student rental property is in great demand. High yields, low vacancy rates, and the fact that many of these students continue to live in the city after graduation, supplying a talent pipeline that boosts the local economy and creates more rental opportunities, have all attracted private investors.

Nottingham has a few top locations to choose from for those wishing to invest in student housing:

Lenton
Dunkirk
Nottingham City Centre

Nottingham City Centre can give you rental yields as high as 8%, the previous two options give average returns of 6%.

Can a non-UK resident purchase real estate in Nottingham?

It is not necessary to be a British citizen in order to own a home in Nottingham; there are no limitations on non-British nationals purchasing real estate in the UK. But you might also consider whether obtaining citizenship and purchasing real estate in the UK are compatible. In contrast to several other nations, purchasing a home in the UK won’t grant you residency or citizenship.
Although there are some important things to remember:
You might need to pay a sizable deposit.
You’ll probably need to provide documentation that is more rigorous.
A mortgage is not as simple to obtain.
If you’re a cash buyer, it would be less troublesome.

Can Foreigners Get a Mortgage to Buy Property in Nottingham?

Although the Nottingham real estate market is accessible to international investors, people who are not UK residents may have trouble qualifying for a mortgage or a sizable loan because the majority of mortgage lenders do not lend to non-UK residents. Foreign investors who have the funds to buy may find the procedure simpler as there are fewer financing choices available.
Foreign investors who are successful in obtaining a UK mortgage often need to put down 5 to 40 percent of the property’s worth. Mortgages also have other costs including booking, appraisal, and organisation fees, which can raise the price by several thousand pounds.
Although your mortgage lender will do an evaluation survey, we suggest you also acquire your own so you’ll know if any potential future repair and maintenance charges are in store.

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Which type of property (freehold or leasehold) should foreign investors consider?

Foreign buyers should consider the property’s leasehold or freehold status when researching the Nottingham housing market.

Apartments or flats are frequently referred to as leasehold properties because the investor does not own the building or the land. For foreign investors in Nottingham, leasehold is typically a suitable option because it entails less responsibility and, should a problem arise, less expense for damage repair.

Freeholders are accountable for any damage to the property since they are the ones who own both the building and the land.

Can foreigners purchase student housing in Nottingham?

The two primary categories of homes that can be rented in the UK should be understood by foreigners intending to invest in a buy-to-let property:

Residential Properties for Students.

Student housing often costs less to buy than residential housing, though this will vary by location.

Nottingham offers good returns on student housing investments in 2022, just like many other well-known student locations.
Nottingham is ideally situated in the East Midlands and offers investors some extremely high rental yields because of its low property costs and strong rental income.

The average home price in Nottingham is just £173,032, which is more than £100,000 less than the national average, according to the UK House Price Index.

It’s vital to remember that student housing will typically cost significantly less than this average, with some student apartments perhaps going for as little as £50,000.

A student investment property also generates a sizable amount of rental revenue.

The average student rent in Nottingham, according to UniAcco, is about £660 per month, but if it’s close to Nottingham City Centre, it can be as high as £1,242.

This implies that people who invest in student housing in Nottingham could receive rental returns of well over 15%!

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Does the UK Stamp Duty Apply to Foreign Investors?

Foreign investors should keep in mind that there will be additional prices, taxes, and fees when purchasing a property in Nottingham. A new stamp duty fee was put in effect for non-UK citizens on April 1, 2021. This 2% stamp duty levy was in addition to the current rate of tax at the time and is based on the value of the property in an effort to lower real estate prices.
The buyer will only be required to pay the 2% extra if the foreign investment is a first-time purchase in the UK and qualifies for the first-time buyer tax rate.

Do Foreign Investors Who Purchase Nottingham Real Estate Have to Pay Capital Gains Tax?

When purchasing a property, foreign investors will be required to pay capital gains tax. The Capital Gains tax is based on the increase in the house’s worth from the purchase price, even if overseas investors may not be subject to it for a few years.

As of April 6th, 2020, Capital Gains Tax on the following had to be reported, paid for, and submitted by non-residents:

Non-residential UK property or land
Residential UK property or land
Rights to assets that have at least 75% of their value from UK land
Mixed-use property or land

Do Foreign Investors in Nottingham Real Estate Have to Pay Rental Income Tax?

Any rental income that a buy-to-let property in the UK generates for foreign buyers is subject to rental income tax. The percentage is applied to the revenue, which is typically paid at the conclusion of the tax year.

Additional Costs and Considerations for Foreign Investors Investing in the UK Market

Work with a property management company

Property management firms can help with the day-to-day responsibilities of owning a rental property, such as finding tenants, addressing tenant issues and concerns, and making sure the property generates steady rental income, if you are investing in a buy-to-let property. Property management firms typically charge a fee based on a percentage of the rental income.

Perform Suitable Due Diligence

Before making any real estate investments, foreign investors who may not be residing in the UK should conduct thorough due diligence. The real estate market (which varies regionally), the firm and developer behind the project, and, if possible, the property itself should all be thoroughly investigated by foreign investors.

Investors can acquire their buy-to-let property virtually if they are unable or unprepared to travel to see investment properties in person. More real estate investment firms now have such procedures in place as a result of the COVID-19 outbreak and nationwide lockdowns in the UK, allowing overseas buyers to conduct remote property purchases and take virtual tours.

Hire a lawyer

It is customary to hire a solicitor when buying any type of property to help with the legal aspects of the investment, such as due diligence, researching any legal issues pertaining to the property, ordering a survey to ensure the property is structurally sound, and generally ensuring the investment process runs smoothly.
Before delivering a purchase contract, leasehold agreement, and completion statement—which specifies the amount of money needed to complete the property purchase—to a foreign investor, a solicitor will also need the appropriate proof of identity documents in order to abide by money laundering regulations.

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Best Investment Districts in Nottingham for Buy-to-Let

Finding the greatest places to invest in a region can be challenging. You must take into account not just the average cost of homes and rental returns, but also the demand for real estate and potential future growth.

You are in luck; we’ve already put in the effort so you don’t have to. Look over the list of the top Nottingham neighbourhoods for buy-to-let properties below to determine where to begin your real estate investment career in Nottingham.

Nottingham City Centre

Average asking price in Nottingham City Centre: £216,809 (December 2021)
Rental Yield on Average: 8.95%
According to Zoopla, the average price of a home is about £216,809, and the average monthly rent is about £1,617. This indicates that the city centre’s typical rental yield is a healthy 8.95%.

The market in Nottingham City Centre isn’t quite as crowded as you might anticipate, in contrast to other significant UK cities.

However, this area of Nottingham is progressively growing as more and more newly constructed homes are being developed in the city, where students and younger residents are more likely to reside.

NG1 Postcode

Average House Price in NG1 Postcode: £213,488 (December 2021)
Rental Yield on Average: 9.03%
With an average home price of £213,488 on Zoopla, prices in this area of the city are reportedly a little lower than those in Nottingham City Centre.

One of the most sought-after areas in Nottingham is the NG1 inner-city postcode.
You may anticipate substantial rental returns of £1,606, with an average rental yield of up to 9.03%.

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Beeston

Beeston’s typical home price is £342,710. (December 2021)
Rental Yield on Average: 6.58%
According to the most recent figures from Zoopla, the average home price in Beeston is close to £342,710, and the average monthly rent is £1,880.

One of the most well-liked residential areas with so many opportunities nearby, Beeston is a favourite among inhabitants of Nottingham.

Not only are there great tram and train connections and easy access to the M1 motorway, but institutions like Nottingham University and Nottingham Science Park are also nearby.

However, because of the numerous connections and economic prospects nearby, real estate can be very expensive in this area.

Sherwood, Arnold, Carlton, and Mapperley

Typical Home price: £186,095 to £310,852 (December 2021)
Rental Yield on Average: 4.20 to 6.84%
You can anticipate yields between 4 to 6% as a result of these rapidly fluctuating property values, with Sherwood and Mapperley probably being the best places to invest for those seeking larger returns.
These popular family neighbourhoods, all of which can be found in North East Nottingham, offer homes starting at just £186,095 in Sherwood.

NG6 and NG8

Average Home Price in NG6 and NG8: £192,514 to £295,471 (December 2021)
Rental Yield on Average: 4.11 to 5.24%
There are many chances for a reliable buy-to-let investment because of the variety of property types available, from privately owned homes to social housing.

For instance, the NG8 postcode experiences prices of approximately £300,000. Despite this, the region has high rent, producing yields of 5.24%.

But NG6 is typically less expensive, with costs closer to £200,000 and returns of 4.11 percent.

These postcodes, which are found in North West Nottingham and include places like Bestwood Village and Aspley, are incredibly well-liked by locals.

West Bridgford

Average Home Price in West Bridgford: £338,592 (December 2021)
Rental Yield on Average: 7.17%
The neighbourhood has earned the nickname “the Chelsea of Nottingham” due to its average home price of £338,592.

In spite of these costs, typical yields aren’t too significantly affected, with returns of 7.17% due to an average monthly rent of more than $2,000.

West Bridgford, one of Nottingham’s wealthier neighbourhoods, is close to Nottingham City Centre and situated just across from the Trent River.

Long Eaton

Average Home price in Long Eaton: £231,563 (December 2021)
Rental Yield on Average: 3.17%
Along with the East Midlands Airport and several logistics parks being near, the M1 is located close by for workers.

Despite these facilities, real estate costs are fairly affordable, at about £231,563.

However, because of the low average rent, yields are negatively impacted and only produce a 3.17% yield.

Long Eaton is a popular family destination because of its convenient proximity to both Derby and Nottingham.

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