Key Considerations for British Buyers in the Dubai Property Market

A report by Betterhomes for the third quarter of 2024 lists British citizens as the top second Dubai property buyers, indicating that the appeal of local business and employment opportunities motivates many Brits to invest in Dubai’s property. In particular, British nationals accounted for 23% of all property buyers, preferring central neighbourhoods such as Downtown Dubai, Dubai Marina, Palm Jumeirah, and Business Bay.

Notably, expats make up 90% of Dubai’s rental tenants, with British nationals constituting 21%. But why do UK citizens move to Dubai?

What Makes Dubai So Appealing for Homebuyers and Investors from the UK?

Resilience of the UAE Economy

The UAE’s efforts to diversify away from oil have strengthened its economic stability. Dubai is set to become the second-largest urban economic powerhouse in the Middle East by 2050, with a GDP exceeding AED 2.2 trillion (£473.87 billion), up from the current AED 1.9 trillion (£409.25 billion).

Reportedly, over 9,500 British millionaires left the UK for Dubai, Paris, and Florida in 2023, reflecting confidence in the UAE’s economic health.

Ownership Rights

As in the UK, there are freehold and leasehold properties. The difference between the two lies in location. Certain areas in Dubai are developed as freehold, while others — as leasehold.

Foreign buyers may only purchase property in freehold areas, which predominate over leasehold in Dubai. A significant advantage is that freehold is associated with houses, flats, and land plots.

Legal Framework

The UAE has investor-friendly policies, such as a liberalised visa framework that offers 10-year residency permits. To obtain this long-term residency permit, an investor will need to purchase property valued at AED 2 million (£433,502).

Appealing Prices

British buyers may find Dubai’s property prices surprisingly appealing. Some may wonder if properties for sale are at auction and whether the indicated amounts are guide prices or shared ownership offers.

But the truth is that the property market in Dubai has a wide price band, excellent amenities, high-end development quality, and reasonable prices for freehold properties.

Here is a summary of prices as of mid-December 2024:

Two-bedroom flats cost around £177,311 (AED 818,040).
A small three-bedroom villa can be bought for £277,212 (AED 1,278,940).
Three-bedroom flats in projects under construction cost approximately £445,303 (AED 2,054,444).
Prices for five-bedroom townhouses start at £552,271 (AED 2,547,950).

Interest-Free Instalments

While mortgages are also available to British citizens, they are offered by a limited number of Dubai banks. A more popular option is interest-free instalment plans.

Dubai development companies vary in down payment amounts and options with post-handover instalments. Buyers should consult with a property expert to find developers with suitable plans and properties.

Taxation

Dubai imposes no property taxes on purchases or sales. Buyers only pay a one-off Dubai Land Department (DLD) fee of 4% upon purchase.

Yes, Dubai’s taxation system is cut from a different cloth: there are no Stamp Duty Land taxes, no Capital Gains taxes, and no annual taxes if you buy and sell property as an individual rather than as a business official.

Communities in Dubai Favoured by British Buyers

In 2023, UK citizens completed 1,325 property transactions in Dubai, becoming the third-largest foreign group in the market.

The mid-year 2024 Billionaire Buyers Survey by Beauchamp reveals that the UK capital faces rising competition from Dubai and that British billionaires spend hundreds of millions of pounds on villas and penthouses in Dubai. Dubai developers have recognised this and begun collaborating with iconic British designers like Aston Martin and Bentley Home to capitalise on this trend.

Below is an overview of some communities featuring residential high-rises and terraced homes with private pools and parking. Each of them has British curriculum schools and nurseries within walking distance.

Palm Jumeirah

In 2024, Dubai saw a significant uptick in luxury rental transactions, with 164 rental contracts for properties with annual rents of AED 1 million (£216,689) or more. Dominating this high-end market was Palm Jumeirah.

Currently, there are properties for sale both in completed and handed-over residential projects as well as those still in development. The range of prices and amenities is extensive; we welcome you to check out our clients’ top three choices: The Palm Beach Tower 3, Ocean House, and elite Como Residences.

Dubai Marina

The top leasing community for flats, Dubai Marina is more than a tourist destination and commercial hub. It is a lucrative investment opportunity, with a YoY flat price growth of 16%, ensuring robust capital appreciation over time.

Prices vary depending on the property area. The smallest units can be found in Rove Home. We would also highlight Sobha Marina for its plethora of available amenities and Cavalli Tower for its exquisite design and spacious penthouses.

Downtown Dubai

Another central area with a YoY cost increase of 16%, it saw the largest number of luxury property sales transactions in Q2 of 2024.

Besides affluent expatriates, Downtown Dubai also attracts lifestyle-focused tenants looking for modern mid-range flats. The most coveted projects under construction include Volta, Rouge by Baccarat, and Baccarat Residences.

Business Bay

Compared to the two aforementioned areas, Business Bay has a higher YoY residential property price increase, peaking at 20%. Commercial property, by the way, has recorded noticeable growth too.

The area is popular among investors and tenants from Europe and the Americas, which creates a multicultural dynamic hub with various business, entertainment, and leisure opportunities. One by Binghatti, Upside Business Bay, and The Crestmark are currently in the spotlight.

How to Buy Property in Dubai If You Are a British Citizen

Buying property in Dubai as a British citizen involves several steps, which start with determining the available budget. If you are considering instalment plans, estimate how much you have for a down payment, the DLD registration fee (4%), and the property agency commission to calculate your total investment amount.

Then:

1. Familiarise Yourself with the Dubai Property Market

Dream big but keep an eye on key details:

(a) the distance from DXB (Dubai International Airport)

(b) developer’s reputation, and

2. Engage a Property Agent

A local agent will help you search for properties and negotiate offers even if you are not currently in the UAE.

With a certified letter of attorney, an agent can even complete the purchase for you, receive your Emirates ID, and register the property with utility providers in your name.

3. View Properties

It is easier with already completed housing. Your agent schedules a date and time, and you attend together or you let the agent assess the property for you, sending you videos and pictures if you are choosing remotely.

However, for those looking to purchase off-plan property, a view of a construction pit or a semi-completed multistoried building will likely not say much. Instead, we advise selecting a bunch of developers based on their projects, sustainability practices, reputation, and instalment plans.

Then go visit their completed projects. This way, you will get a feel — and possibly even a touch — of what they develop, including the quality of their amenities and finishing materials.

4. Consider Maintenance Fees

Once you have identified your property, estimate how much it will cost you to maintain it. The lower end of maintenance fees for a unit in Dubai starts at AED 5 per sq m, which is around £1.08. For an 85 sq m property, for instance, the owner will have to pay £1,101 annually.

The more premium the property, the more luxurious its amenities. Consequently, maintenance fees may grow with the property segment.

5. Complete the Deal

You will need to make a formal offer through your property agent. If it is accepted, sign a Memorandum of Understanding outlining the terms of sale, including payment schedules.

Pay a deposit (usually around 10% of the purchase price) to secure your property. Then a developer’s representative alongside your agent will draw up a sales and purchase agreement, which you will need to review and sign. As a final step, pay the DLD-required transfer fee.

Upon that, DLD will issue a title deed stating that your property is registered in your name. Using this document, you can apply for a UAE residency visa and Emirates ID.

Problems You May Encounter When Buying Property in Dubai

A great advantage of Dubai’s property market is that most of the transaction process can be done digitally. You can track registration online, receive notifications when your papers are ready, and make deposits or payments via online payment systems.

However, mishaps can occur when buyers are not familiar with Dubai’s areas and fail to identify one suited to their needs properly. Who would want a second home in a tourist-flooded location when secluded gated villa communities offer the much-needed bliss amidst lush shrubs?

The worst-case scenario is choosing a developer with a tarnished reputation. Luckily, all Dubai developers are obliged to use escrow accounts to protect buyers’ investments. But only a local property agent can tell if there are spots in the developer’s history and if its property is a good option for investment.

Share your property preferences with us, and we will provide you with a tailored list of flats or houses from reliable developers with international recognition!