Why overseas investors continue to be drawn to UK property

Why overseas investors continue to be drawn to UK property

There is no denying that this is a tumultuous time for the UK property market. The uncertainty surrounding Brexit and decline of house prices in London being two key features that the media love to write about. However, it is these features that are also creating a catalyst for investment, especially from overseas investors. Here are some of the key reasons why international investors continue to see UK property as a great opportunity:

Exchange Rates

Since Brexit, the pound has dipped considerably against most of the major currencies. This has prompted an increase in overseas investment simply because they are now getting more property for their money. Seasoned international investors take the long-term view that once the pound recovers from all the fallout surrounding Brexit, it will creep up in value. So, in light of this, there has never been a better time to grab a property bargain.

Regional Cities

London’s house price decline has seen UK regional cities, especially in the north, rise to the forefront of investors’ minds. Cities such as Birmingham, Manchester, Newcastle and Liverpool have seen significant growth in rental properties and with house prices well below the capital, overseas investors have been swooping in on properties that offer better rental yields and opportunity for capital growth than any London property could.

Supply and Demand

The ongoing supply and demand issue in the UK property market has been well chronicled. There simply isn’t enough affordable housing out there to satisfy the huge demand. According to the Association of Residential Letting Agents, demand from would-be tenants increased in July 2018 to its highest level since September last year. This demand is pushing up rents and overseas investors are seeing this as a great opportunity to add to their portfolios and increase their yields.

The Rise of Student Property

UK universities continue to attract swathes of international students and this is creating a huge demand for purpose-built student accommodation to house them. With the volume of student housing versus the number of students being woefully short, good quality student property is of a high premium and there is no shortage of takers. With guaranteed rents and hardly any void periods, investing in student property has proved incredibly lucrative for overseas investors.

Whilst Brexit and other related factors might have an impact on the UK housing market and economy, UK property is still seen as a safe bet by international investors who take a longer-term view.