Towards the end of October 2018, Chancellor Phillip Hammond outlined the changes proposed to the government’s spending, and the 2018 Autumn Budget revealed that overseas investors could fall victim to even more savage tax changes come the New Year.

Despite the 3% surcharge added to secondary properties which crippled the market and dampened investor enthusiasm back in 2016, the government have once again proposed an additional stamp duty surcharge of 1% that this time targets foreign buyers rather than international and local investors alike.

Although the change is subject to a consultation which is expected to take place in January, investors have already begun to take action, and estate services expect to see an outpour of interest in the UK property market from all corners of the world in the coming months.

Prior to Phillip Hammond’s proposals, UK Prime Minister Theresa May discussed the possibility of increasing stamp duty by a further 3% in order to raise funds that would help to tackle social issues such as the homeless crisis.

Come January, overseas investors could have to pay an additional 1% when purchasing property in the UK, alongside the pre-existing punishing tax reforms that already affect such buyers. The already volatile market is at risk with future political changes on the horizon, and experts warn that penalising foreign investment could intensify these worries and potentially have a devastating effect on the property market in years to come.

It’s not just the property market that could suffer in the wake of these new changes, as some fear that targeting overseas investors could deter global business and international students, and previously prospering relationships between the UK and foreign countries could become fractured.

Research reveals that now more than half of all UK residential property investments originate from overseas, meaning that proposed changes to stamp duty, although small, could have a huge impact on the sales and buy-to-let sector, and as a result we could experience a shift in market activity and buying patterns.

The proposed changes, although daunting, are still subject to a consultation. In the coming months however, it can be expected that a rising number of international buyers will begin to diversify their portfolio and take advantage of the current state of the UK property market. The low entry costs demanded, alongside the already attractive property prices which are expected to spike in years to come, will push foreign buyers to invest prior to the introduction of any new punishing tax reforms.

There are a number of reasons as to why UK property investment is a great opportunity for both local and international buyers, including the growing demand for rental properties and purpose build student accommodation.

Investors can also expect to enjoy unprecedented returns across the country, with both major cities and seaside towns ranking as buy-to-let hotspots which all boast both affordability and strong yields season after season.