More and more US investors are looking to the UK for property investment opportunities – and it’s easy to see why. The exchange rate between the US dollar and British pound is favourable right now, meaning your money can go further in the UK than it might have in the past. On top of that, the UK property market is known for being stable and well-regulated, with clear rules, strong rental demand, and generally fewer surprises compared to other international markets.
For US investors, UK property can be a great way to build long-term returns, especially as part of a strategy to diversify a portfolio and spread risk across different regions. That said, investing from overseas can still feel daunting. Having an end-to-end property sourcing and management company on the ground – with strong local knowledge – can really help guide you through the process.
In this article, we’ll break down the benefits of investing in UK property, highlight some of the key differences between the US and UK markets, and explain why Nottinghamshire is a great place to start your UK investment journey. Let’s get stuck in.
Why invest in UK property?
There are plenty of reasons to consider UK property, starting with the country’s well-documented housing shortage. Demand for rental homes consistently outstrips supply – especially in cities and larger towns – which means landlords can usually expect steady rental income and the potential for long-term property value growth.
While major cities like London, Manchester and Birmingham have traditionally drawn the most attention, they also tend to come with higher price tags and lower rental yields. Regional cities – like those in Nottinghamshire – often offer better value. Property prices are generally more affordable, and rental returns can be higher, making them a smart choice for investors who want to maximise cash flow without sacrificing long-term growth.
Another big advantage of investing in the UK is the consistency of its legal system. In the US, property laws can vary a lot between states and even between cities, which can make managing a portfolio more complicated. In the UK, the process is more centralised and transparent, giving overseas investors added stability and peace of mind.
What’s the difference between the UK and US property markets?
If you’re thinking about investing in property abroad, it’s important to understand how the local market operates. The UK has a few key differences compared to the US – especially when it comes to regulations and taxation. Let’s take a closer look at each.
1. Regulations
One of the biggest differences between the US and UK property markets is the legal and regulatory setup. In the UK, property laws are centralised, meaning they apply across the whole country. This creates a more predictable and transparent environment for landlords – especially those managing their investments from overseas.
That said, the UK government does update housing regulations now and then. A good current example is the proposed Renters Reform Bill, which aims to make renting fairer and more secure for tenants, while also modernising how landlords manage tenancies. It’s worth keeping an eye on changes like this, but they’re usually well-publicised and introduced gradually, giving landlords time to adjust.
In contrast, regulations in the US can vary widely from state to state, or even between cities. Some areas have strict rent controls or tenant protections that can make it harder to forecast rental income or manage properties consistently. The UK’s standardised approach often makes life easier for international investors and adds to the appeal of UK property as a long-term investment.
2. Taxation
Understanding how tax works in the UK is also key. When buying property, you’ll need to pay Stamp Duty Land Tax (SDLT) – a one-off tax based on the purchase price. If you’re a non-UK resident, you also currently have to pay a 2% surcharge on top of the standard SDLT rates.
Rental income from UK property is taxable too, so you’ll need to register with HM Revenue & Customs (HMRC). However, many overseas landlords apply through the Non-Resident Landlord Scheme, which allows you to receive your rental income without tax being deducted at source – helping you manage your finances more efficiently.
To make things even more tax-efficient, some international investors choose to set up a UK Limited Company to buy and hold their properties. This can offer more flexibility in how profits are taxed and reinvested, but it’s definitely worth getting personalised tax advice to make sure it aligns with your long-term goals.
Lastly, while capital gains tax and inheritance tax do apply in the UK, the UK–US tax treaty is designed to prevent you from being taxed twice on the same income. This can offer some extra reassurance when deciding to invest in property in the UK.
A closer look at tax and compliance
Investing in UK property can be highly rewarding, but like any international investment, it’s essential to understand the tax landscape, especially as a non-resident. The good news? With the right structure and professional support, it’s all manageable and shouldn’t hold you back.
Here are the key taxes to be aware of:
Stamp Duty Land Tax (SDLT)
This is a one-off tax paid when you purchase a property. Rates increase with the value of the property, and as an overseas buyer, you’ll also need to factor in an additional 2% surcharge. It’s not unexpected, but it’s important to build this into your upfront costs from day one.
Income Tax
Rental income earned in the UK is taxable, but you don’t necessarily need to have tax deducted at source. By registering under the Non-Resident Landlord Scheme, you can receive rent in full and take care of your tax obligations through a self-assessment return each year. This gives you more control and can simplify cash flow planning.
Capital Gains Tax (CGT)
If you sell your UK property for more than you paid, you may be liable for CGT on the profit (gains since April 2015, for overseas investors). The rate depends on your overall income, but it’s currently set at 18% for basic-rate taxpayers and 28% for higher-rate taxpayers. This is another area where advance planning can make a big difference.
Inheritance Tax (IHT)
UK-based assets, including property, are subject to inheritance tax, even if you’re a non-resident. The current rate is 40% on estates above £325,000. While that may sound steep, there are ways to plan ahead. Holding property through a UK limited company, for example, can offer more flexibility when it comes to succession and estate planning.
Double Taxation Relief
Fortunately, the UK–US tax treaty means you shouldn’t be taxed twice on the same income. But this only works if you file correctly in both countries and submit the appropriate forms– like the W-8BEN or W-8BEN-E. This is where having both a UK accountant and a US tax advisor pays off, helping you stay compliant without unnecessary stress.
How to set up a UK limited company as a US investor
For many US investors, buying property in the UK through a UK limited company can offer tax advantages, added flexibility, and a more structured way to grow a portfolio. It might sound a bit complex at first, but the good news is it’s completely legal – and actually quite common.
Let’s walk through the key points.
1. Legalities
UK company law permits non-UK residents to be both directors and shareholders of UK companies. So, you don’t need to live in the UK to set up or run a limited company. The only requirement is that there’s at least one real person (a “natural person”) listed as a director – the company can’t be made up entirely of other companies.
This setup gives US-based investors the ability to fully own and operate a UK property business from abroad, without needing to relocate or be physically present.
2. Tax implications
Once your UK limited company is up and running, it will be considered a UK tax resident. That means it needs to pay UK Corporation Tax (currently 25%) on profits from rental income or property sales.
If you choose to take profits out of the company – for example, by paying yourself dividends – those payments might be subject to withholding tax. However, thanks to the UK–US tax treaty, this can often be reduced to 0%, provided you file the correct forms (such as the US W-8BEN-E).
As a director or shareholder, you typically won’t owe UK income tax unless you’re drawing a salary or receiving income directly from the company. Your main tax obligations will remain in the US, where you’ll report any income or dividends through your regular tax return.
3. Strategic advantages
Beyond the legal and tax setup, using a UK limited company can also offer some real strategic benefits – especially if you’re planning to grow your portfolio over time or take a more business-minded approach to property investment.
Here are a few key reasons why many US investors go down this route:
- Liability protection – Your personal finances are kept separate from your property investments.
- Easier inheritance planning – Shares in a company can usually be passed on or sold more easily than individual properties.
- Mortgage interest relief – Companies can fully deduct mortgage interest as a business expense, which individuals in the UK can no longer do in full.
- Flexible use of profits – You can decide how and when to take profits (e.g. through dividends or director loans), or leave funds in the company to reinvest in more properties.
Altogether, this structure can make it easier to scale your investment business while managing tax exposure more effectively.
4. Compliance and administration
Of course, running a company comes with a bit of admin – but it’s all part of building a well-run, sustainable investment strategy. And with the right support in place, it’s very manageable.
Here’s what you’ll need to stay compliant:
- A UK registered office address
- Annual accounts filed with Companies House
- A UK accountant or tax adviser to handle Corporation Tax and ensure compliance
- Guidance on double taxation if you’re also filing US returns
Most international investors work with professionals who understand both the UK and US systems. This makes the process smoother and helps you stay focused on the bigger picture – growing your portfolio, not just managing the paperwork.
5. Financing considerations
Financing is another crucial consideration of any investment strategy, and it’s something you’ll want to plan for early on. The good news is that UK mortgages are available to foreign investors – including those buying through a limited company – though there are a few things to be aware of.
UK lenders typically expect:
- A 25–30% deposit
- A strong application and clean financial history
- Working with a specialist mortgage broker
In many cases, buying through a UK limited company can actually open up more lending options than buying as an individual. That said, if the company’s director isn’t a UK resident, mortgage choices may still be more limited. This is where working with an experienced broker – ideally one familiar with international investors – can really pay off.
Why invest in Nottinghamshire?
Once you’ve considered the legal structure, tax benefits and financing options, the next step is choosing where to invest. For US investors keen to maximise rental returns without paying premium prices, Nottingham and the wider Nottinghamshire area offer a compelling mix of affordability, demand, and long-term growth potential.
Typical rental yields here range from 6% to 8% (which is right in line with what many investors target), but at much lower property purchase prices compared to cities like London, Bristol or even Manchester. This makes Nottinghamshire an excellent choice whether you’re just getting started or looking to expand your portfolio while keeping upfront costs manageable.
So, what makes Nottinghamshire stand out?
Strong rental demand from students and young professionals
Nottingham is home to two major universities – Nottingham Trent University and the University of Nottingham – which attract tens of thousands of students every year. This creates consistent demand for good-quality rental homes, especially near campuses and transport links.
A growing and diverse economy
The region is experiencing growth in key sectors like tech, logistics, healthcare, and life sciences. New business hubs and major employers are driving job creation, bringing more people to the area who need housing.
Ongoing regeneration and infrastructure investment
Nottingham is benefiting from multi-million-pound regeneration projects, including the Broadmarsh redevelopment, city centre improvements, and upgraded transport links. Future HS2 connectivity to the East Midlands will also improve access to London and other major cities, enhancing the region’s appeal.
A vibrant, liveable city culture
Nottingham combines a rich history with a lively, diverse atmosphere. From nightlife and live music to parks and heritage sites, it’s a place where tenants of all ages want to live.
A smart alternative to London
While London remains a global hotspot, high prices and lower yields can limit returns. Nottinghamshire offers a chance to achieve strong rental income and capital growth without the risk of buying into an overheated market.
All these factors come together to make Nottingham and its surrounding towns a smart, future-focused choice for US investors looking to build long-term value in the UK property market.
Practical considerations for US investors
Investing in UK property from abroad is definitely achievable, but it does come with a few extra steps compared to buying locally. Planning ahead and working with the right professionals will make the process much smoother—and help you avoid costly mistakes along the way.
Decide how to invest
One of the first and most important decisions is whether to buy as an individual or through a UK limited company. Each route comes with different tax, reporting, and mortgage implications. While a company structure can offer better tax treatment and greater long-term flexibility, it also involves more administration. To make the best choice for your circumstances and goals, it’s worth consulting a UK tax adviser early on.
Do your due diligence
Even if the numbers on paper look promising, thorough research is essential before making a purchase. This means working closely with local experts – such as surveyors, property sourcers, and solicitors – who understand the area and can help you assess the property’s true value, condition, and investment potential. If you’re less familiar with UK property types or neighbourhood dynamics, their insights will be invaluable.
Understand currency and legal requirements
Currency fluctuations can either boost or reduce your returns, so it’s wise to build in a buffer and keep a close eye on exchange rates throughout your investment journey. Additionally, you’ll need to understand your tax and legal responsibilities in both the US and UK, especially if you’re earning rental income, paying taxes, or transferring funds between countries.
Work with a local property manager
Managing a property from overseas can be challenging, especially when it comes to staying on top of day-to-day tasks and meeting local legal requirements. That’s where a UK-based property manager like Purseglove Property can make a big difference. We can handle everything from tenant communication and rent collection to organising repairs and keeping the property compliant.
Plus, if you’re investing in more complex property types, like HMOs (Houses in Multiple Occupation), having professional management becomes even more important, as these properties need specific licences and must meet additional safety standards.
Getting a mortgage in the UK as an overseas buyer
One of the first questions many overseas investors ask is: Can I actually get a mortgage in the UK? The good news is yes, you can. But the process does work a little differently compared to what you might be used to in the US.
Several UK lenders offer buy-to-let mortgage products specifically for non-residents, including US citizens. These lenders are familiar with the needs of international investors and will typically accept foreign income as part of their affordability checks.
Rather than approaching banks directly, most overseas buyers work with a specialist mortgage broker. These brokers know which lenders are open to foreign applicants and how to structure your application to meet their criteria. You’ll usually need to provide full documentation, including ID, proof of income, and sometimes tax returns or credit reports.
What to expect
Most lenders will require a deposit of around 25–30%, and interest rates are usually a bit higher than those offered to UK residents. Lenders may also apply stricter “stress testing,” i.e. they’ll want to ensure the rental income from the property could still cover the mortgage payments, even if interest rates were to rise in the future.
Releasing equity after renovation
Once you’ve secured a mortgage and successfully completed a purchase, there’s also the opportunity to optimise your financing over time. One strategy many experienced investors use is to refinance after renovating the property.
If you’ve added value, whether through a refurbishment, extension, or conversion, you may be able to remortgage based on the property’s new, higher valuation. This allows you to release some of the equity you’ve built and reinvest that capital into your next project, helping you scale your portfolio more quickly and efficiently.
Be aware of key differences
While refinancing can be a powerful tool, it’s important to understand that UK lending practices differ in some key ways from those in the US. Elements like affordability assessments, the widespread use of interest-only loans, and how mortgage terms are structured may feel unfamiliar at first.
That’s why working with a mortgage broker who specialises in international clients is so valuable. They’ll not only help you navigate the process but also ensure you’re paired with the right product – so you can avoid surprises and make informed decisions at every step.
Partner with Purseglove Property for property investment in Nottingham
At Purseglove Property, we help US investors confidently build high-performing UK property portfolios, without the guesswork or stress of doing it alone.
Our end-to-end service covers every stage of the journey:
- Sourcing high-potential properties
- Developing your investment strategy
- Overseeing refurbishments
- Finding quality tenants
- Managing your property long-term
We’re based in Nottinghamshire, so we have deep local knowledge and know where to find value. We can advise which areas are on the rise, and how to navigate the nuances that often trip up first-time international investors.
Whether you’re investing as an individual or through a UK limited company, we can help you handle the legal, financial, and operational details. Our property management approach is built around long-term success. By supporting tenants and keeping properties well-maintained, we help minimise vacancies and maximise returns – creating a win-win for everyone involved!
Final thoughts
The UK remains a stable, transparent, and rewarding market for property investment – especially for US investors seeking reliable income and long-term growth.
By targeting high-demand regional areas like Nottinghamshire, you can access strong yields, affordable entry points, and real potential for capital appreciation, without the inflated costs of London.
If you’re ready to explore your next investment move, book a free discovery call with our team, or download our Overseas Investor Guide to get started with clarity and confidence.
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