Legal considerations for international investors in London’s property market

June, 2023

London is one of the most attractive cities in the world for international property investors. The city offers a stable political system, strong and safe legal title, long-term asset appreciation, favourable time zone, excellent educational facilities and transparent tax structures. However, investing in London’s property market can be challenging for international investors due to the complex legal system and regulations. In this article, we will discuss some of the legal considerations that international investors should keep in mind when investing in London’s property market.

Firstly, it is important to note that foreign investors are subject to the same laws and regulations as UK residents when investing in London’s property market. This means that they must comply with all UK laws and regulations related to property ownership and investment. For example, foreign investors must pay stamp duty land tax (SDLT) on their property purchases in the UK. SDLT is a tax on land transactions in England and Northern Ireland. The amount of SDLT payable depends on the value of the property being purchased.

Secondly, foreign investors should be aware of the restrictions on foreign ownership of UK property. The UK government has introduced several measures to restrict foreign ownership of UK property in recent years. For example, non-UK residents are subject to an additional 2% SDLT surcharge when purchasing residential property in England and Northern Ireland. In addition, non-UK residents are also subject to capital gains tax (CGT) on their UK property sales.

Thirdly, foreign investors should be aware of the different types of ownership structures available for UK property investments. The most common types of ownership structures are freehold and leasehold. Freehold ownership gives the owner full ownership rights over the property and the land it sits on. Leasehold ownership gives the owner the right to use the property for a fixed period of time (usually 99 or 125 years) but does not give them full ownership rights over the land.

Fourthly, foreign investors should be aware of Section 24 of the Finance (No. 2) Act 2015 which affects landlords who own residential properties in their private capacity. This section restricts landlords from deducting all their finance costs from their rental income when calculating their taxable profits. Instead, landlords will receive a basic rate reduction from their income tax liability for their finance costs.

Finally, foreign investors should be aware of the different legal requirements for renting out their UK properties. For example, landlords must comply with all UK laws related to renting out properties. This includes obtaining an Energy Performance Certificate (EPC), complying with fire safety regulations and ensuring that their properties are safe and habitable.

Investing in London’s property market can be a lucrative opportunity for international investors. However, it is important to keep in mind the legal considerations discussed above when investing in London’s property market. Getting guidance from specialists well-versed in the UK's legal, tax, and other property-related services is a must for any international investor looking to get into the UK property market.

The Fountayne Group provides comprehensive property management solutions for international investors looking to invest in London’s property market. Our team of experts can help you navigate through the complex legal system and regulations related to investing in London’s property market. We offer a range of services including property acquisition, management and disposal services.

For more information on our professional property management solutions contact Steve Hughes at

Recent Articles