A lack of clarity about the UK economy and political decisions has made overseas property investors cautious of the property market, research showed.
Butterfield Mortgages carried out a survey of 300 mortgage brokers and 71% said they were seeing more caution among their overseas clients ahead of the Autumn Budget. Additionally, 73% said recent tax changes had made UK property less attractive as an investment.
Three-quarters of brokers said their clients needed more support to understand the UK property market since Labour came to power. Meanwhile, 67% said the base rate had a significant impact on the decision-making of investors.
Butterfield Mortgages said this suggested that the political and economic landscape was having a detrimental effect on market sentiment.
Despite this, 74% of brokers said improving and streamlining the home buying process would have a positive impact on the market if introduced.
Alpa Bhakta, CEO of Butterfield Mortgages Limited, said: “With the Autumn Budget drawing close, this data underlines what’s at stake, with policy reforms clearly influencing how international investors think about UK property – particularly in prime markets, where the higher concentration of overseas buyers means the impact is most obvious.
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“More than anything, right now we need clarity. If the Budget can deliver that, property buyers will be able to make informed decisions and plan with confidence. To support this, brokers and lenders have a crucial role to play after the Budget. By maintaining clear communication and a flexible approach, lenders can help ensure that international buyers continue to see the UK as a stable and attractive market for investment.”