We are often asked by our clients: Can I get a residency visa if I buy a property in Dubai?

Wading through visa regulations, requirements and restrictions can be confusing, so in an effort to provide clarity on the subject, we have created this guide for you.

So, firstly: Is it possible to obtain a residency visa when purchasing a property in Dubai?
Whilst the visa options available to anyone looking to live, work or invest in Dubai have changed a fair bit in recent years, there are currently two options open to property investors who would like to live or stay in Dubai.

Types of Visas
The two types of visa currently available to property investors in Dubai are:

• The Property Investor Visa
• The Six Months Residency Visa

How Does Each Visa Work?

The Property Investor Visa – This is a two-year renewable visa that is issued by the Dubai Land Department. This visa enables you to become a UAE resident, obtain an Emirates ID and UAE driving license. You can also sponsor family to join you as well. One key restriction is that this visa is only available for Dubai property investments.

The Six Months Residency Visa – This option is a standard visa, which in many ways is closer to a visitor visa than a residence visa. It is issued by the relevant immigration authority. As you can probably tell, it lasts for 6 months, but can be renewed for as long as you meet the requirements. With this visa, you are granted multi-entry access to the UAE, and is available to those who purchase property in any of the seven Emirates, not just Dubai.

Requirements:

Property
The property you invest in must meet certain requirements in order for you to qualify for either of these visas:

• The property must be valued at Dh1 million or more. This valuation is based on the purchase price listed on the title deed, not the current value of the property when you apply for the visa.
• For joint property ownership, such as owning the property with your spouse, the shared value of your property must exceed Dh1 million.
• The Dh1 million valuation can only apply to one title deed – you cannot consolidate all your investments to meet this valuation requirement on your visa application.
• You will need to provide the title deed (in the name of the applicant) with your visa application, therefore only completed properties qualify. Properties bought off-plan cannot be used to apply for a visa.
• The property you invest in must be freehold and must be a residential property in a “habitable” condition i.e. it must be suitable to be lived in and maintained in a good condition. Commercial property investments do not qualify for these visas.

Minimum Income
Both visas have a minimum income requirement of Dh10,000 per month (or equivalent currency). This can be earned either inside or outside the UAE. You will need to provide proof of income as part of your application.

Documents Needed:

If you meet the requirements listed above, you will then be able to apply for your desired visa with either the Dubai Land Department or relevant immigration authority (depending on which you choose to apply for, see above). As part of your application, you will need to provide the following documents:

• Title Deed on the property
• Passport copy of the applicant
• Current visa status/copy
• Passport photos (x6)
• Certificate of Good Conduct (from Dubai Police)
• Bank Statements
• Utility Bill

Costs
The Six Month Residency Visa costs approximately Dh2,300, plus additional fees for sponsorship of a family member (Dh250) and renewal (Dh1,100 each time).

By contrast, the Property Investor Visa costs is considerably more expensive at approximately Dh13,000-Dh15,000, which includes:

• A police clearance letter (Dh220)
• Administration fees (Dh420)
• Application costs (Dh3,000)
• Typing and entry permit (Dh1,100)
• DED license issuance (Dh 8,440)
• Stamping/Emirates ID/medical (Dh2,490)
• Additional fees for family sponsorship and renewals (Dh5,000-6,000)

Things to Be Aware Of:

• Citizenship: Neither visa option will enable you to obtain citizenship to the UAE
• Health: You will be required to undergo an in-country medical examination
• Employment: The visas are purely for residency purposes only, you will not be permitted to undertake employment with either option
• Length of Stay: Whilst there is no maximum term for either visa (providing you continue to renew them at the end of each visa’s term), if you are granted the Property Investor Visa, you must not spend more than six consecutive months outside of Dubai, otherwise your visa will be automatically cancelled

So, which visa should you get?

Well, both options have their pros and cons, so it really depends on your individual circumstances and what you are looking for from both a property investment and a visa.

If you are investing in Dubai specifically, have a larger budget and want more flexibility from your visa, then the Property Investor Visa may well be for you.

However, if you are looking for a cheaper option and can work with the restrictions involved, the Six Month Residency Visa might suit you better.

Finally, the advice given in this document is for guidance only. For further or more in-depth information, consult an immigration expert.

To start your property investment journey in Dubai, why not head on over to see what we currently have on offer in the UAE.

Over the past 11 years or so, we at Aspen Woolf have worked hard to find the best wealth-building opportunities for our clients whilst fostering our reputation as a reliable company to invest with. And with so many exciting developments in the property market right now, we’re certainly not going to rest on our laurels! Indeed, 2017 looks to be a big year for us, where we aim to grow, diversify and develop even further. Our founder and director, Oliver Ramsden, talks through some of our upcoming plans.

“We’re branching out with our product offering as the year goes on. This will include more offerings in Dubai and in the United States. There will definitely still be demand here in the UK, but we want to make sure that the product we offer domestically will have a competitive edge over what else might be currently available.”

We came to this decision after carefully observing our investors, asking ourselves what they were concerned about and what they were currently looking for. One thing in particular we found was that following changes in global financial markets in 2016, international clients were starting to look at UK property more and more.

“We see our international investors eyeing up UK property a bit more. We already saw this in 2016 so we expect it to continue throughout this year as well… One thing that will probably be making a difference now more than ever for international property purchases is a good currency brokerage. You want to make sure whatever money you have is going as far as it can go. All of a sudden property prices are 15-20% less than they were a year ago, thanks to exchange rates.”

But with a lack of supply in the UK looming, we are making it a priority to look outside the EU.

“Even we, an experienced agent with connections to countless developers, aren’t seeing the stock out there. Some stock we will immediately turn down as they simply don’t pass our due diligence, which of course limits what is available even more. Overall we would say coming up with good stock (i.e. developments) in genuinely good areas is becoming increasingly difficult.”

This has led us to begin expanding in to the Middle East and the US – an increasingly profitable area right now – as we move forward.

“We have an office based in Dubai sourcing property investments for clients looking to invest in the Middle-East. As well as this we’re opening an office in New York later in 2017 that will better cater our clients looking to branch out into the US.”

We’re keen to keep building on our success, but we recognise that with an ever-changeable market, we don’t want to get ahead of ourselves.

“We’ll also be looking to offer other properties available in Europe and possibly opening an office in Hong Kong. However, if we’ve learned anything it is that it’s better to take things slow and do it right, rather than rush into things. We always want to make sure whatever it is we do, it’s always in our client’s interest.”

And it’s this philosophy, of always having our clients front of mind, that we believe will lead us into further, greater success, this year and for many more to come.

If you would like to begin your investment journey with us, take a look at some of the exciting developments we currently have available.

It’s Valentine’s Day, love is in the air. And what city is more romantic than Liverpool? No, wait, seriously, hear me out. There are plenty of reasons to fall in love with this ancient, Northern city. Here are just a few of them:

1. If You Adore Stunning Architecture…

Liverpool has the largest number of Grade II listed buildings – aside from London, of course – in the UK (including the iconic Eldon Grove), giving Sunday afternoon strolls around the city a very romantic feel. UNESCO also loves the city, having designated Liverpool’s historic waterfront a World Heritage Site. This area stretches from Albert Dock to Stanley Dock and inwards to include the Ropewalks district and St George’s Quarter.

2. Liverpool Loves Stories

Many a famous writer has spent time in the city over the years, including Herman Melville, Charles Dickens, Daniel Defoe and Nathaniel Hawthorne. Liverpool is also home to the world’s first lending library!

3. Take Me Out

The city has an abundance of places to go out. From its phenomenal range of cafes, bars and restaurants to the largest number of museums and galleries outside London. Plenty of great options for your next date!

4. A Heartthrob of the Silver Screen

Liverpool is fast becoming known as the UK’s Northern Hollywood, with its own major film festival and a number of high-profile films, such as Harry Potter and the Deathly Hallows: Part One and Captain America: The First Avenger, being shot in the city.

5. Love Me Do

Serenade your loved one in the Pop Capital of the UK, a title bestowed by Guinness World Records. Liverpool is world-renowned for giving us The Beatles, and the Cavern Club, where they and many other famous musical acts were discovered.

6. For the Love of the Game

Football is a big part of the city, and Liverpool’s two clubs, Everton FC and Liverpool C, have some of the game’s most ardent fans (as seen at the yearly Merseyside Derby). Between them, the clubs have won a whopping 27 English First Division titles (including in recent years the Premier League), 24 FA Charity Shields 12 FA Cup titles, 10 League Cup titles, 5 European Cup titles, 3 UEFA Cup titles and 1 European Cup Winners’ Cup title.

7. The Honeymoon Isn’t Over!

Liverpool is one of the most visited places in the UK. Tourists bring in approximately £1.3billion to the local economy, with about 75 million people heading to the city each year.

8. Creativity at its Heart

With its cosmopolitan make-up and values, Liverpool has become a national hub for many creative industries. The Baltic Triangle area is at the centre of city’s growing tech cluster. In fact, the Liverpool’s flourishing digital sector is rivalling that of London’s Tech City.

9. From China With Love

Liverpool’s docks has made the city a major trading hub throughout history, and this is what brought a large number of Chinese merchants and sailors to the shores of the Mersey. They established Europe’s oldest Chinatown in Liverpool, which remains an incredibly vibrant part of the city to this day.

10. Love is The Best Medicine

In 1898, the School of Tropical Medicine opened in Liverpool. It was the first in the world of its kind. The city can also boast a host of other medical first, including the first X-ray diagnosis, district nurse, cancer research centre and lifeboat station in the UK.

11. Love Where You Live

Liverpool has a high liveability factor, thanks to its mix of cultural experiences, low house prices and good job prospects. This is why students and young professional flock to the city, giving the population a higher percentage of under 30s than England as a whole.

12. Liverpool Loves its Liver Birds

Atop the iconic Royal Liver Building, sit the Liver Birds. These 6 metre tall sculptures are symbols of the city. But legend has it that if the two birds ever come to face each other Liverpool will crumble to the ground!

13. Faith and Love

The fifth-largest cathedral in world can be found in Liverpool. One of the city’s largest structures, and one of the world’s tallest non-spired church buildings, this beautiful place of worship has been designated by National Heritage as a Grade I listed building.

14. If You Love to Shop…

Liverpool ONE is the UK’s largest open air shopping centre, featuring a wide range of retailers, eateries and entertainment facilities including a 36-hole adventure golf centre and 14-screen cinema. This multi-million pound project helped turn the city into one of the five most popular retail destinations in the UK.

This beautiful, historic and thriving city is certainly capable of stealing your heart. Every year Liverpool attracts hundreds of thousands of people to live, study, work and invest in the city, many of whom fall head over heels in the process.

If Liverpool is setting your heart aflutter, and you think you would like to invest in property in the city, take a look at the opportunities we currently have available here.

While investing in bricks and mortar is as reliable an investment as ever, securing the best income is reliant on a range of factors. One of the key things is buying a property in an area that offers the best rental yields and potential for capital growth.

Although London has long been seen as a solid choice, with prices rising at eye-watering rates savvy investors are looking further afield to achieve the best returns. But knowing just where to pick can be tricky, involving a lot of research.

At Aspen Woolf, we consider it our responsibility to monitor the trends and conditions within the property industry, in order to give our clients the best recommendations. Here’s what our founder and director, Oliver Ramsden had to say recently about the current state of the market:

“The UK property market stayed strong in 2016 despite a turbulent year, with confidence remaining in the buy-to-let sector in particular.

Rental growth increased but at a slower rate than 2015; this was to be expected however, notably due to the unexpected Brexit result stalling market movement for a short period.

House prices should start to increase above the 3% mark again in 2017, especially in buy-to-let ‘hotspots’ which we have identified.”

By analysing market activity and data from recent years, we have identified the following parts of the UK as being the top 10 buy-to-let hotspots in 2017:

The 10 Best Postcode Areas to Invest In 2017

As well as knowing the best places to invest, it is also worth being aware of the postcodes you might want to avoid. For example, April 2016 saw rents peak in the London letting market, showing signs of the market in the UK capital weakening.

“We forecast this trend to continue, especially within prime central London, hence have identified West Central London, or the WC postcode, as the top UK location to avoid in 2017,”

Here are the areas that our research has shown to be the top 10 worst performing buy-to-let areas in the country:

The 10 Worst Postcode Areas to Invest in 2017

By knowing the top performing places in the UK, and taking into account the worst performers too, you can decide which area presents the best prospects for your future investment. To help narrow down the best possible investment in the city of your choice, it is always worth asking a knowledgeable agent to go through their top recommendation to maximise your returns.

If you found this article helpful, you may also be interested in reading Student Property Investment Still Hot in 2017 and Dubai is Being Hailed the Top Investment Spot for 2017.

If you’re ready to start your investment journey, you take a look at our range of property investments here.

People often say ‘if these walls could talk, what stories they’d tell’. Well that’s certainly true of Eldon Grove, the iconic Grade-II listed building located in Liverpool’s Vauxhall district.

The Vauxhall area is perhaps most famous for having the Scotland Road running through it. This historic stagecoach highway took travellers to and from Scotland, providing a key trade route between the north and south of the UK. The transient nature of the place attracted the wide variety of immigrants to the area. Scottish, Irish and Italian migrants all began to call it home.

Over time this ever-growing population created a significant need for more housing. This led to the growth of slums in the area. Determined to improve the lives of their poorer residents, Liverpool city council set out to change this.

Eldon Grove was designed to be part of a labourers’ village, but with a vital difference; it would give people a sense of pride in themselves and their home. Officially opened by the Countess of Derby in 1912 it has half-timbered gables and large bay windows with a chocolate-box aesthetic echoing historic British design and giving the block a homely feel. In fact, Eldon Grove was deemed to be amongst the best pre-war social housing in the country, setting a new standard.

Eldon Grove went on to become a much loved home for many, providing a vibrant community for locals. But in later decades, with new investment lacking, people began to move out and move on. Despite being granted Grade-II listed status, and having a second life as student accommodation, eventually Eldon Grove was abandoned all together, falling into an unfortunate state of dilapidation and disrepair.

Now, having seen the opportunity to restore these striking buildings to their former glory, Stonebase Construction Limited – part of the successful Eldonian Group Limited (EGL) – have begun to shape a new development around this local treasure. This massive project will involve the restoration of the existing structures, as well as the addition of three new blocks. The interiors will be modernised, whilst the exterior will be completely rejuvenated, paying respect to the stunning original architecture. There will be a mix of one, two and three bedroom apartments with parking also available.

The new Eldon Grove is also designed to recreate the sense of community that existed for its former occupants. This includes resurrecting key elements from the original design, like the communal gardens and shared balcony areas. These will aim to encourage the new residents to meet, befriend neighbours, and really create a positive social community environment.

The importance placed on the social and affordability aspects of the development have meant that not only has the local council permitted the project, but are also some of its most enthusiastic backers. Local residents are among those excited about seeing Eldon Grove’s transformation taking place, with some saying: “It’s a beautiful building that deserves to be preserved and I’m delighted that something is happening to restore it.”

This new development looks set to have a lasting positive impact on the local community and economy, as well as providing a fantastic opportunity to investors looking to add a piece of history to their property portfolio.

If you are interested in securing an apartment, you can find out more about our Eldon Grove investment opportunity here.

When buying property in the UK, it is important to be aware of the tax requirements that come with such a purchase and continued owning of that asset. In England, Wales and Northern Ireland, tax on the sale of property is known as Stamp Duty Land Tax (SDLT), often shortened to Stamp Duty (in Scotland you pay Land and Buildings Transaction Tax instead). Any tax can seem confusing if it is your first time encountering it. Just what is this particular tax, how does it work and will it apply to my purchase? Don’t worry, we’re here to help!

What is Stamp Duty?

As stated above, Stamp Duty is the tax that is applied to property sales in England, Wales and Northern Ireland. Not all property is subject to stamp duty, as it is dependent on the value of the property. There are also different rates that apply depending on whether the land or property is designated as residential or non-residential.

Currently, the thresholds above which stamp duty is applied are:

• £125,000 for residential property
• £150,000 for non-residential property

Any property transaction under those thresholds won’t incur stamp duty, but any sales over those points will be subject to stamp duty at a certain rate.

There is also a higher rate of Stamp Duty for property purchases if you already own a property in the UK and are purchasing an additional one i.e. a buy-to-let property. In this case all property purchases will incur the additional higher rate and will be taxed at a minimum rate of 3%, with the percentage increasing as the price increases.

So what are those rates and how are they applied?

The rate of stamp duty that is applied to a property sale is linked to the value of the property. The higher the price, the higher the tax.

For non-residential properties, the following rates of stamp duty are applied:

• Up to £150,000, there is no stamp duty tax applied
• The portion between £150,001 and £250,000 is taxed at 2%
• The remaining amount, above £250,000, is taxed at 5%

For residential properties, the rates of stamp duty work out as follows:

• Up to £125,000, there is no stamp duty tax applied
• The portion between £125,001 and £250,000 is taxed at 2%
• The portion between £250,001 and £925,000 is taxed at 5%
• The portion between £925,001 and £1.5 million is taxed at 10%
• The remaining amount, above £1.5 million, is taxed at 12%

However, if you are purchasing an additional residential property for £40,000 or more, when you already own at least one other (as is usually the case with buy-to-let properties), they will be taxed at the higher rate of Stamp Duty. For these transactions, stamp duty is applied at the following rates:

• Properties up to £125,000 are taxed at 3%
• The portion between £125,001 and £250,000 is taxed at 5%
• The portion between £250,001 and £925,000 is taxed at 8%
• The portion between £925,001 and £1.5 million is taxed at 13%
• The remaining amount, above £1.5 million, is taxed at 15%

Example

So how does that work out exactly? Let’s take the example of a buy-to-let property that costs £275,000 (if you already own one or more properties, and therefore the higher rate of Stamp Duty applies). The Stamp Duty you would owe on this property is calculated like this:

• 3% on the first £125,000 = £3,750
• 5% on the next £125,000 = £6,250
• 8% on the final £25,000 = £2,000
• Total SDLT = £12,000

Stamp duty is applied equally to freehold and leasehold properties.

So, now you know how Stamp Duty is applied to different property purchases, but how is it paid?

How Do I Pay My Stamp Duty?

Stamp Duty is paid to HMRC, the UK’s taxation department. Whenever you purchase a property of any kind, you must send a SDLT return to HMRC. You must then pay any tax incurred within 30 days of completion.

If you are working with a solicitor, agent or conveyancer to complete your purchase, they will usually file your return and pay the tax on your behalf on the day of completion, then adding the amount to the fees they charge you.

However, if you are conducting the transaction entirely by yourself, it is your responsibility to file the return and pay the owed taxes directly to HMRC.

Understanding stamp duty can seem daunting, and naturally you’ll want to ensure you pay the correct amount. But with patience and careful consideration (and the assistance of a reliable solicitor!), it needn’t be a big headache in the property buying process.

If you found this article useful, you may also find Is Property Still a Good Investment? and The Difference Between Freehold Vs Leasehold Properties interesting.

Property has been the favoured form of many investors for decades.

But with the recent changes to taxes and mortgages for the buy-to-let market, investing in property has become a little more challenging. This naturally may lead you to wonder: is it still a good investment?

The answer is a resounding: YES!

Property has many benefits, both for short-term and long-term investment prospects, when compared to other potential investment routes.

The Benefits of Property Investment

Firstly, property generally offers a good level of capital appreciation over time. This is a pretty reliable way to grow your savings. Even if property prices go down for a short period, they will almost certainly go up again.

You also have the advantage an ongoing rental income – so you have short-term and long-term gain from your asset. How many other forms of investment offer this dual value?

With a physical asset, you also have the option of using it yourself if and when you need it, as a holiday home, as a flat for your child to live in whilst at university or to live in yourself at any time.

Another plus is that a property investment can work as a pension fund, providing an annual rental income that can be used or saved, before being sold so you can live off the enhanced capital during retirement.

But how does it stand up against other forms of investment?

Property vs Savings

One down-side to any property investment is that having your money tied up in a physical asset means you don’t have immediate access to it in an emergency. A savings account or an easy-access cash ISA can provide that instant availability. But it comes at a cost – there is a trade-off between easy access to your cash and higher returns.

Buy-to-let typically offers anywhere between 3%-10% yields in rent in the UK, depending of course on the type of property and the area it’s in. That is a far higher return on investment than any savings/ISA account currently available. The most generous UK savings account on the market at present is with Masthaven and provides 2.01% (AER) interest fixed for 5 years, while Paragon Bank’s 5 Year Fixed Rate Cash ISA offers a measly 1.60% interest (AER). You could also potentially gain more from a Stocks and Shares ISA, but these are an inherently riskier type of investment.

Which brings us to Stocks and Shares themselves.

Property vs Stocks and Shares

As with a Stocks and Shares ISA, investing in the stock market directly could potentially give you higher returns than a simple property investment. But the markets are notoriously unpredictable and more directly influenced by political and economic turmoil than the property market. This means you can never be too sure just how much you can earn from your investment, and there’s a distinct possibility that you could lose your capital rather quickly. If you are a more risk-adverse person, stocks and shares probably aren’t the right option for you. But if you can afford to take the risk, the potential gains may perhaps be worth it.

Although there are even higher-risk forms of investment, such as hedge funds.

Property vs Hedge Funds

Hedge funds are an alternative investment prospect that pools the money of a group to invest aggressively in numerous areas in order to produce particularly high returns. As with investing in the stock market, hedge funds involve a significant amount of risk to your capital. With this, though, can come higher rewards, particularly if the manager of your hedge fund is acutely attune to current investment possibilities.

However, as with any investment there is a catch. Hedge funds are usually only open to accredited investors and therefore aren’t accessible as an everyday investment opportunity. So regardless of how much you have to invest, if you aren’t accredited, your best bet is still likely to be property.

Despite a tumultuous year in the world of politics and the economic markets, property still presents the safest and most lucrative option for most investors. At the end of the day it’s a relatively flexible and tangible asset that even in the worst of cases can be passed down to relatives and loved ones.

If you found this article useful, you may also be interested in reading Changes to Lettings Agency Fees: What You Need to Know and How Property Investment Can Help Fund Your Child’s University Education.

It is a truth universally acknowledged that good transport links have a positive effect on local house prices. The general rule of thumb that the closer a property is to a train station (or tram stop, in some cities), the higher the price it will fetch. For example, according to analysis by Nationwide building society:

• Homes in proximity to Glasgow rail station are worth an extra £9,400
• Homes close to a Metrolink stop in Manchester are worth an extra £12,000
• Homes with a tube station nearby in London are worth an extra £42,000

And equally, problematic local transport can impact prices negatively. You only have to look at the drop in property prices and rents along the Southern Rail train routes (following months of frustration for commuters due to the ongoing disruption on their network) to see that.

Being close to an airport can also have pros and cons in relation to local property markets. Proximity can be seen as a positive thing for those who travel often, but overall being close to a flight path is seen as less desirable and therefore tends to pull house prices down a little. Heathrow is a good example of this, particularly in the light of the recent decision to build a third runway at the airport.

When it comes to investing in property, it pays to be savvy about what new transport infrastructure projects are being discussed, as they can cause prices in related areas to really soar. Two large-scale train lines in particular, Crossrail and HS2, demonstrate this trend perfectly.

Crossrail

The new Crossrail route launching in 2019, will run from reading and Heathrow, through the centre of London and out to Shenfield and Abbey Wood. Also known as the Elizabeth line, it is set to significantly improve commuting times from eastern and western areas into London.

This has already been having a noticeable effect on property along the route. According to Zoopla, since work began on Crossrail in 2009, homes close to stations on the new line have gone up by an average of £187,727!

Lawrence Hall of Zoopla has said: “With just under two years to go until the line is fully operational the impact on property values close to the 40 stops is becoming clear. Proximity to transport is one of the key requirements when Londoners and commuters look to buy property.”
And with a further ‘Crossrail 2’ route now under consideration, it could be worthwhile keeping an eye on how the proposals develop.

HS2

The UK’s second big high-speed train line, HS2, is looking to cut travel times to London from key cities in the Midlands and the North of England, including Birmingham and Manchester. The proposed routes will reduce travel times into London considerably. For example journeys from Manchester are set to reduce from 2hrs 8 mins to 1hr 8 mins. This will open up new areas as possible commuter hubs for those who work in London but can’t afford to buy a home in the capital.

There are predictions of house price rises of as much as 40% in some areas along the route. The prospect of this surge in demand is already drawing the attention of investors, who are betting on the potential property price rises making them the most in terms of capital appreciation.

When considering where to buy a property, whether to live in or as an investment, the local transport options are definitely a key factor to research.

If you found this article interesting, you may wish to read How Metrolink is Driving Up Yields in Manchester or World Heritage Sites Command Higher House Prices – How to Take Advantage.

We get this question all the time, especially from our overseas investors. In the UK we have two main forms of property and land ownership recognised by law, these are called Freehold and Leasehold. In general, houses are almost always freehold, whereas flats and apartments are usually leasehold. There are pros and cons for both forms of ownership. But what are the key differences between the two, and how will they affect you as a property owner?

Leasehold

With leasehold you own your individual property (an apartment within a larger building, for example) but not the land the physical building sits on. In this sense you lease, or in other words rent, it from the landholder for an agreed length of time. This is most common with flats and apartments. Owning a leasehold property usually means you incur service charges and ground rent, payable to the landlord (who owns the freehold for the land and building), to cover the maintenance and upkeep of the communal areas and grounds within which your property sits.

New build leasehold properties usually have leases of at least 125 years, this is very commonplace and something many British people wouldn’t think twice about. However, leaseholds on new builds can vary from 99 years up to 999 years in length. Something to keep in mind when buying any leasehold property in the UK is ensuring that the remaining length of your lease is long enough. For example, having a lease under 70 years can prove problematic when trying to sell, as it’s hard for buyers to get a mortgage for a property with a short lease. There are often options to extend your lease and this is something which is highly recommended once a lease starts to get close to the 80-year mark. However, be aware of ‘virtual freeholds’, more on that further along.

Purchase a share of the freehold

Another option you may have at some point is to purchase a share of the freehold along with the other leasehold property owners in the building. This would mean that your property itself is still leasehold, but you, along with your fellow freeholders, would form a management company that would own the entire building, and can set the terms and length of each individual properties lease. Responsibility for the insurance and upkeep of the building as a whole would also now be shared between you and the other freeholders.

Things to keep in mind:

• Leaseholds are very commonplace in the UK and buyers of property don’t really see it as a negative.
• Make sure when buying an off-plan or new-build property that the leasehold in the contract is at least 125 years. 99 years is also common, but we recommend anything up from 125 years.
• Effectively, when a lease comes to an end the Tenant (Lessee) no longer has a right to occupy the property and has to give back possession to the Landlord (Lessor). The landlord then owns the property and can resell the lease.
• You have a legal right to extend your leasehold after owning the property for more than 2 years. So make sure you top-up your lease before it dips below 80 years.
• A flat with a 50-year lease, for example, will only be worth about 70% of what an identical flat with a 99-year lease would be worth.

Freehold

If you own a freehold property, then you own both the building and land indefinitely (until you sell them on of course). Whilst, naturally, you don’t have to pay any service charges or ground rent, this does mean the costs of upkeep are wholly your responsibility. And if you own a share of the freehold with other tenants in an apartment block, you’ll have to agree on how issues such as insurance and maintenance of the building are managed. This will usually be organised through a company set up by those who own a share of the freehold, although you may choose to simply employ a management company to oversee things.

Generally, only houses are sold freehold in England because you’ll own the house and the land the house sits on. In Scotland, however, most property is sold as freehold, regardless of whether it is a house or an apartment.

Watch out for ‘Virtual Freeholds’

What are they? Simply put a ‘virtual freehold’ is a property marketed with exceptionally long leases of 999-years.

The term ‘virtual freehold’ implies flat owners do not need to be concerned when buying a leasehold property, because the long lease should theoretically protect their capital investment indefinitely. But the reality is that buying a ‘virtual freehold’ property can become a real headache.

As we said earlier, when flat owners in England purchase a leasehold property they are required to pay ground rent to the freeholder, who retains ownership of the land on which the property is built. Burdensome ground rent clauses often attached to leases of 999 years mean that the ground rent doubles every 10 years! Such difficult ground rent schedules and high service charges seriously affect the flat owner’s ability to sell the property in the future.

This is why at Aspen Woolf we aim to recommend good property solicitors to our buyers. Solicitors need to be very careful, because if they don’t clearly inform their clients about the real implications of such clauses, flat owners may have a valid claim against them for professional negligence. Thankfully, we never put forth such properties as they would never get past our stringent due diligence processes, but it’s always good to keep in mind for future investments whether made through us or other companies.

In the end, when purchasing a property, always make sure you understand whether it is freehold or leasehold. And if a property has an exceptionally long leasehold, then make sure to read the fine print as you might be sucked into an expensive journey! A good real estate agent and property solicitor should minimise your worries and help you with your future property ownership and responsibilities.

If you found this article useful and want to learn more about property before you jump in, then you may also want to read about Sensible Tax Planning for Property Investors or the difference between Short-Term vs Long-Term Lets.

The historic city of Edinburgh is Scotland’s capital city. A hub for finance, creativity and culture, it is one of the most popular destinations in the UK for young professionals, students and tourists. This incredibly beautiful city also has a lot to offer investors. Purchasing a buy-to-let property in Edinburgh in the current climate is an incredibly shrewd move. Here’s why we think you should consider adding such an investment to your portfolio.

Creative, Cultured City

In 2004, Edinburgh was declared the first UNESCO City of Literature, in recognition of its significant contributions to the literary world. In fact, the city is the birthplace of such literary greats as Sir Arthur Conan Doyle, Muriel Spark, Sir Walter Scott, Irvine Welsh and Robert Louis Stevenson. It’s hardly surprising that J.K. Rowling found so much inspiration here, leading to her writing much of the first Harry Potter book in an Edinburgh coffee shop! And they aren’t the only creative people from the city to come to prominence. Beloved comedian Ronnie Corbett, famously of the Two Ronnies, and award-winning actor Sir Sean Connery, best known for being the first James Bond, were both born in the city.

Rockstar North, makers of the popular Grand Theft Auto video game franchise, are yet another big name in creative circles that calls Edinburgh home. They live amongst a growing number of start-up, tech and new media companies in what is the second most productive tech cluster in the UK (behind London). Surrounded by so much beautiful architecture and myriad of museums, art galleries and libraries, there’s plenty to inspire these budding entrepreneurs.

And with so much to see and do, it’s not surprising that Edinburgh is a major tourist hotspot.

Top for Tourism

Edinburgh is the second most visited city in the UK (behind London) by foreign tourists, and it’s not hard to see why so many travel to this incredibly stunning city.

As a visitor, you are spoilt for choice when it comes to museums, with the National Museum of Scotland, the Museum of Edinburgh, the Museum of Childhood, National War Museum and the National Library of Scotland all well worth a visit. Not to mention the historic Edinburgh castle and the Palace of Holyroodhouse, an official residence of the British Monarchy! Then there’s Scotland’s second most popular tourist attraction, Edinburgh Zoo. The zoo is home to an incredible selection of animals, including Tian Tian and Yang Guang, two giant pandas on loan from China. Another animal that many come to visit is the Greyfriars Bobby. A statue of the loyal dog, who local lore says waited by his masters grave for 14 years, can be found near the main entrance to Greyfriars Kirkyard.

Of course many people plan their trip to coincide with one of the many festivals held in the city annually. The most famous of these is the Edinburgh Fringe Festival, a spin-off from the Edinburgh International Festival (the world’s largest arts festival), which it has now overtaken in popularity. Every August the city comes alive with comedy, theatre and a variety of other performance arts acts with over 28,000 performers and over 2 million ticket-holders descending on the city. These festivals alone contribute £313million to the Scottish economy.

And tourism is just one of the many industries that contributes to Edinburgh’s thriving economy.

Edinburgh’s Economic Prowess

Aside from the large amount of revenue brought in via tourism, Edinburgh’s resident population contributes to the local economy through a range of key industries. Known as a hub for finance, higher education and scientific research, the city is a haven for intellectual and culture-loving young professionals.

Since the Bank of Scotland opened over 300 years ago, banking has been a pillar of Edinburgh’s economy. Today, the investment and insurance sectors are particularly strong areas, with firms such as Standard Life and Scottish Widows based in the city. This has led to Edinburgh being the UK’s second biggest financial centre (again after London) and a top four city within Europe in terms of equity assets.

And with four major universities in and around the city, they are big local employers. In fact, the University of Edinburgh is the third biggest employer within the city. The cluster of higher education institutions has led to a large scientific community, focused on various realms of research. In fact, Peter Higgs, part of the team that came up with the theory of the Higgs Boson particle – considered a key particle in the Standard Model theory of physics – lives in Edinburgh!

With so many top universities and so much to see and do, it’s only natural that Edinburgh is very attractive to its countless students.

Unrivalled University Life

With four highly reputable universities in the city, plus a thrilling mix of nightlife and culture, Edinburgh has proven to be a significant draw for students from all across the globe.

Perhaps the best known, the University of Edinburgh is one of the most ancient universities in the UK, having opened way back in 1583! It is joined by Edinburgh Napier University, Heriot-Watt University and, just outside the city limits, Queen Mary’s University. Other institutions include the Royal College of Surgeons of Edinburgh and the Royal College of Physicians of Edinburgh and the Edinburgh College of Art. Between them, they cover a diverse range of subjects from the arts to the sciences to practical fields like teaching.

There’s a lot to keep students entertained in Edinburgh, whether they enjoy sports, shopping, art or getting back to nature – Arthur’s Seat provides some fantastic views. And when they need to blow off steam, students can head to the likes of George Street or Lothian Road to experience the city’s fantastic nightlife.

Such a high number of higher education institutions has led to students making up one-fifth of Edinburgh’s total population. And with such a large student population, comes an even larger demand for housing.

Prosperous Property Market

Architecture in Edinburgh is a big part of what gives the city its charm. The Old and New Town districts were listed as a UNESCO World Heritage Site in 1995, thanks to the unique look of the medieval street layout of Old Town and the stunning Georgian designs on display in New Town.

And whether you’re looking for a property with historic character or something more modern, there’s plenty to choose from here. Scottish home buyers also benefit from the fact that the majority of properties are sold on a freehold basis.

The private rented sector in Scotland is also booming, with the number of people living in privately rented accommodation in Scotland doubling in the past 10 years! There are current 330,000 properties privately rented out, a figure which is expected to rise to over 500,000 by 2020. Rents in Edinburgh are climbing as there is such a huge demand from students and professionals to live in the city. The average rent in Edinburgh is now £951, a figure which has risen 25.3% in the last 5 years, and rents continue to climb as demand far outstrips supply.

House prices too are considerably cheaper in the Scottish capital than they are in London for comparable properties. And with house prices rising by 8.9% in the last year, the city proves an attractive prospect for both those looking to live and invest in Edinburgh.

If you’ve enjoyed this article and are considering investing in property in this great UK city, then take a look at our latest Edinburgh property.