How UK Real Estate Reforms Benefit UAE Investors

‍Understanding UK Real Estate Ownership Models

Navigating UK real estate requires understanding three main ownership types:

• Freehold: Permanent ownership of the property and land.
• Leasehold: Ownership for a set term (e.g., 99–999 years).
• Commonhold: Shared freehold ownership, often used for flats.

While most flats and some houses in the UK are leasehold, complexities such as high service charges and ground rents have made leasehold less appealing, especially for international investors.

The Challenges and Opportunities for UAE Investors

Leasehold arrangements have historically included challenges like high ground rents and complex management. Propertymark research shows:

• 72% of UK property professionals report buyers are more aware of leasehold drawbacks.
• 60% of buyers now request lease details upfront.

This awareness is driving demand for more transparent and investor-friendly options, creating a unique window for UAE investors to capitalise on reforms.

Key Benefits of the Leasehold and Commonhold Reform Bill

The UK has already implemented the Leasehold and Freehold Reform Act, with measures such as:

• Restricting the use of long residential leases for houses.
• Simplifying lease extensions and freehold purchases.
• Reducing ground rents to minimal or ‘peppercorn’ rates.

The proposed Leasehold and Commonhold Reform Bill will enhance these efforts by:

• Modernising commonhold systems to streamline property management.
• Strengthening leaseholder rights to extend leases, purchase freeholds, and manage properties.
• Regulating ground rents to prevent excessive charges.
• Protecting freehold homeowners on mixed-tenure estates.

For UAE investors, this means easier, more cost-effective entry into the UK market, with added security and transparency.

Professionalising the UK Real Estate Sector

To further protect investors, the UK Government is exploring mandatory qualifications for real estate agents. This initiative aims to eliminate rogue agents and ensure professional standards, providing UAE investors with greater confidence when entering the market.

Expert Insights on the Reforms

Timothy Douglas of Propertymark emphasises:

"These reforms make UK real estate more accessible, secure, and transparent—ideal for international investors looking for high returns and long-term growth."