The United Kingdom of Great Britain and Northern Ireland is the 22nd most populous nation in the world. It was the world’s first industrialised country and foremost power in the 19th and early 20th centuries. To this day, Britain continues to wield considerable influence in the international economic, cultural, military, scientific and political spheres. With a population of about 64 million, the UK is the 3rd largest nation in the EU, charting its biggest population growth in Europe in 2013.
Britain is internationally renowned in the world of culture and arts, including in literature, visual and performing arts, media, architecture and music. The UK has been described as a cultural superpower, with London – the capital city of the UK – being the cultural capital of the world. Football plays an integral role in the UK – a legacy that has spread to many countries, including Malaysia!
Quick Facts for the Investor
Population 64 million
Population Growth 0.7%
Capital London
Currency British pound (£)
GDP per capita $39,372
Inflation Rate 0.5%
BLR 0.5%
Mortgage financing availability Yes (T&C apply)
Rental Income Tax 20% (for up to £32K), standard expense deductions allowed
Capital Gains Tax N/A for foreigners
Stamp Duty Scaled depending on property price

*Update: Kindly note that capital gains tax (18%-20% depending on profits gained) is now applicable to foreigners.

Trade & Economy

Despite the recent downturn in the Eurozone, Britain remains a trading juggernaut and the world’s largest financial centre alongside New York, with a GDP of $2.3 Trillion or $36,941 per capita. Its GDP growth beat the rest of the G7 in the second quarter of 2014 (Figure 1).

Figure 1: GDP growth projection
Source: IMF World Economic Outlook Update July 2014

Education remains a huge driver of the British economy; its higher education sector is worth over £73 billion. British education ranks 6th in the global education league, ahead of Canada, Germany, France and the US according to the Economist Intelligence Unit.

Housing climate

Britain maintains a strong housing climate, with property prices having registered continuous growth over the last three decades (Figure 2). While London has commonly led the way in property price increase, prices in other parts of UK have noticeably peaked. The UK housing market is expected tomaintain its growth momentum as the economy corrects, as well as following the full launch of the government’s Help to Buy scheme in 2013;and as foreign investments continue to increase amid the housingdemand-supply mismatch.

Figure 2: London vs UK Property Prices
Source: Nationwide Building Society, 2014

2014 charted recovery across the UK housing market, with a 6% increase in prices across the country, bringing the average value to £268,895.

House Prices in 2015

Housing prices are expected to rise this year. Halifax has reported an increase of between 4% – 8%, while Savills and Knight Frank have predicted a rise of 6.5% and 7% respectively. Savills reports that, having experienced the strongest price growth, London property will flatline next year with a five-year price growth totally just 10.4%.

The Royal Institution of Chartered Surveyors expects the North West, South East, West Midlands and Yorkshire and Humberside to see the largest rises in property prices at 5%, while in London, prices will be stagnant.

Chief UK and European economist Howard Archer says price rises will be driven by recent reforms to stamp duty, which will cut tax for majority of buyers, high and rising employment, earnings growth and low mortgage rates (Figure 3).

UK’s Treasury forecaster, the Office for Budget Responsibility expects prices to rise by 7.4%, with house prices expecting to increase by a total of 31.4% by the first quarter of 2020.

Figure 3: UK Lending Rates