Guiding the Growing Demand for Foreign Investment in UK Property
Overseas buyers’ appetite for UK property helps to keep the UK property market buoyant, particularly when it comes to new build properties designed with renters in mind.
The latest research from JLL shows that the UK is still a long way from meeting its target of building 300,000 new homes by 2020. However, with foreign money pouring into the UK property market, the delivery of new homes is at least speeding up.
“Foreign investors are looking for long-term, stable property investment opportunities in the UK. By purchasing from developers around the country, they are contributing to the capital available to build more new homes, which the country so desperately needs.”
As a general rule, foreign buyers account for around 50% of those buying property in the UK through Surrenden Invest. However, when the pound drops, the number of overseas buyers can suddenly rocket, meaning that Surrenden’s property experts have to be ready to meet sharp increases in demand at a moment’s notice.
Buyers from the Middle East, China and Hong Kong top the list of those looking to add UK properties to their portfolio through Surrenden Invest, including a not insignificant number of expats. They are often looking for homes at the higher end of the market; luxury apartments in top locations fit the bill perfectly, such as Ancoats Gardens, which offers accommodation that is a cut above the rest and has the wow factor that foreign buyers are seeking.
“Fluctuations in the value of the pound can have an almost immediate impact on where demand for UK investment properties is coming from. When sterling’s value drops, foreign buyers are keen to pick up bargain homes – and with Brexit causing the pound to fluctuate fairly regularly, savvy investors are waiting for the right moment to proceed at very short notice.”
Foreign investment in the UK – across all asset classes, not just property – is worth some £11 trillion, according to the Office for National Statistics. That amount increased by £796 billion in 2016. The top investors in the UK are the US, France, Germany, the Netherlands, Ireland and Luxembourg.
Meeting the needs of this diverse group of investors means taking the time to understand their needs and guiding them into the right opportunities. So far as property investment is concerned, that means offering a range of products in a variety of locations, all with the emphasis on high quality accommodation for which there is sustained tenant demand. In the words of Surrenden Invest’s Jonathan Stephens, it’s about “adding value and finding the opportunities that the investors can’t source for themselves.”
Ensuring the UK Property Market Continues to Flourish
With UK house prices expected to rise by an average of 14.8% between 2019 and 2023, according to Savills, demand for foreign investors doesn’t seem likely to diminish any time soon. Not even the prospect of paying more stamp duty seems likely to make a difference. An investor purchasing a home at the average price nationally could reasonably expect it to go up in value by £32,000 by 2023. An investor playing currency fluctuations correctly could make even more.
Since the pound’s value plummeted in 2016, following the UK’s decision to leave the EU, the Surrenden Invest team have been supporting investors from around the world. From showing them around the UK’s leading regional cities to advising on which properties have been designed with future-proof elements that will appeal to the next generation of renters, the Surrenden property experts are working hard to ensure that the UK property market continues to flourish.
For regular updates on UK property investment matters, you can follow the Surrenden Invest team on social media.