Dubai or London: Which is better and more expensive to own a property?

By Stuart Leslie

On the face of it, London and Dubai both appear to be excellent options for Indian buyers looking for an investment property or overseas home – both have rapidly rising rental rates and fairly similar yields, appreciating house prices, relatively low property transaction taxes and are popular with Indian expats. But look beneath the surface and there are some significant advantages to buying in the UK rather than the UAE.

Glossy property brochures from the city now proclaim that purchase prices are rising 17% a year, but average prices are still 11% lower than they were in 2014, according to research by Knight Frank.

Capital growth in the London property market, on the other hand, has tended to be steady and relatively certain. Despite occasional market dips, London has a solid and reliable upward trend – over the past 30 years it has compounded 9% each year.

Availability

It is becoming harder to find a home in crowded Dubai, as the Government predicts the population will increase from 3.6 million today to 5.8 million by 2040. This means that most new developments will be high-rise – not to everyone’s taste. In addition, the Government restricts foreign ownership to certain zones.

Thanks to the excellent public transport in London, buyers have a wide choice of accessible Boroughs to choose from, many with vast amounts of public open green space. Areas such as Harrow, Brent and Hillingdon are especially popular with Indian expats and offer a much greater variety of accommodation types and sizes than Dubai.

Transport

London is one of the best connected cities in the world, with 11 Underground lines covering 402 km and featuring 272 stations, plus 670 different bus routes. The recent opening of the Elizabeth Line (Crossrail) has boosted the housing market in areas near stations, and plans are underway for a West London Orbital Overground line that would include four new stations and 10 new interchanges linking North and North West London, giving a boost to the popularity and price of these areas.

Transport for London’s new Superloop bus network will link outer London areas to the centre of the city, providing another fast, cheap and environmentally friendly transport option.

Dubai’s Metro covers only 74.6km on just two lines with 47 stations, there are 14.5km of tramway and a limited public bus service with 119 routes.

Finance

Dubai is the home of the super-wealthy, to the extent that 80% of recent home sales were cash. Non-UAE residents will need a deposit of 40-50%, resident expats a 20-30% deposit. Meanwhile, in London you can find lenders who will only require a 10% deposit for foreign nationals moving to the city to work. Prices in Dubai are slightly cheaper, averaging £386,000 for an apartment compared with just over £500,000 in London.

Language and culture

With most people in India speaking good English, and a similar legal system when it comes to house purchases, buying in the UK is relatively uncomplicated. Multicultural London offers amazing Hindu temples, gurdwaras and mosques, as well as excellent restaurants that offer a taste of home.

The Arabic-speaking, strictly Islamic kingdom of Dubai presents more cultural challenges; alcohol is strictly regulated, and WhatsApp and Skype calls are banned to name a few.

Education

In Dubai, non-citizens must pay for primary and secondary education, while in the UK it is free for all residents. This year, the number of sponsored study visas granted to Indian students increased by 54 compared to 2022. At the university level, the UK is popular with Indian students and is home to two of the top 10 universities in the world – Imperial College London and University College London. Dubai’s highest-rated institution, Zayed University, is in the 401st position in The World University Rankings.

Health

Perhaps because of its ubiquitous car use, plus its stifling summer temperatures and airborne desert sand, Dubai is rated as “unhealthy” on the global Air Quality Index, compared with a “good” rating for London.

In October 2023, the UAE capital had the fifth worst air quality of any global city. You need private health insurance for medical treatment in Dubai, while anyone “ordinarily resident” in the UK enjoys free healthcare via the National Health Service.

In conclusion, while both cities have much to offer, take a closer look at the dynamic, multicultural regeneration areas of London for the optimum combination of a great lifestyle, value for money and a sound investment.

(Author is International Sales and Marketing Director for Barratt London)