Question: I intend to move to the UAE this year but am in a quandary about what to do with my property in the UK.
I have a flat in Windsor with a mortgage. It is worth about £850,000 ($1.1 million) with about £500,000 equity. Should I keep that property and rent it out, or sell it now and invest in buying a property in the UAE?
If I were to go with the second option, I am concerned about whether I would be able to sell my UAE property easily if I want to return to the UK. I do not want to lose money.
I am also concerned about getting a quality property because at 59 years of age, I will struggle to get a decent mortgage and it will be expensive.
I think my best strategy is to rent in the UAE and rent out my UK property, but I am interested in your opinion. PP, UK
Answer: I would like to address your concern about selling in the UAE. You don’t mention where you want to move to in the Emirates, so I’ll assume it is Dubai.
You should not worry about the selling aspect. Unlike the UK, where it can take up to six months to sell a property, the process in the UAE is very quick.
Even if you were to buy with a mortgage, the time from making an offer to having the keys in hand should be no more than 45 days, or two months maximum. So, if you did buy and needed to sell, you should be able to do so in a relatively short period.
Your strategy of renting over buying is, I think, very sensible. I’m not sure what the market is like in Windsor at the moment, but if you let your property, you are likely to achieve an income which you can offset against your UAE rent.
Where you decide to live will determine the level of your rent, but rents have been steadily rising for several years in the UAE so take this into consideration.
Renting in the UAE is also very fast. You can view today and move into the property a few days later. All that is required is a residency visa, the deposit and the rent payments. No references are required.
Q: I’ve been following the Dubai real estate market from afar and I’m seriously considering buying an investment property. I own a duplex apartment in Fulham, west London, which I may remortgage to raise funds.
My first-floor maisonette has a shared freehold title with the ground-floor apartment. My question is, does Dubai have shared freehold or freehold apartments or are they all leasehold and if so, what is the term of the lease? I am keen to understand whether the markets are similar or not. JV, London
A: The Dubai property market underwent a radical change in 2002 when foreign ownership was opened up in designated areas where previously only locals or Gulf nationals were allowed to buy. This change started the transformation that has created today's Dubai property market.
In a nutshell, Dubai was sectioned into freehold zones where expats can buy. Areas reserved for locals or Gulf buyers also remain.
Whether you buy an apartment or a villa in the permissible zones, it will have a freehold title, without a time limit. Having said this, there are also a few areas of Dubai such as Silicon Oasis and Dubai Investment Park that have leasehold properties.
These leases typically start at 99 years and the term reduces annually. Unlike the UK, where the Leasehold Reform Act (1993) allows leaseholders the right to extend the lease from the freeholder, no such law exists in Dubai. If you buy a leasehold unit here and the years reduce to zero, at that point you will no longer have rights over the property.
More areas have been opened up where expats can buy, including some along Sheikh Zayed Road that this year were re-zoned from leasehold to freehold. I expect more of these areas will get re-classified to enable expats and foreign nationals to buy.
The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to mario@novviproperties.com
