The resilience of the UK property market can be seen by the fact that it has barely trembled in the face of years of uncertainty over Brexit. It’s therefore little wonder that international property investors have been eager to buy into both the residential and commercial markets.
If you’re a foreign investor considering buying property in the UK, here are three points you should know.
There is still a chronic undersupply of all kinds of property
If you have a preference for investing in any given property niche (e.g. residential buy-to-let, holiday lets or purpose-built student accommodation), then you can essentially take it as read that the UK needs more of it.
There may be variations in what type of accommodation is needed most in which part of the country, but there is almost guaranteed to be a shortage of it.
This means that in addition to the opportunities for investing in property (residential or commercial) to be let for income, there are also opportunities for investing in property developments and/or buying off-plan property.
The currency markets are still favourable (but this may not last)
Ever since the 2016 referendum plunged the UK into a protracted period of wrangling with the EU, the Pound has been if not exactly in the global-exchange wilderness, then certainly not in the best of health.
This has been great news for international investors who have been able to acquire property in the UK at discounted prices.
With the uncertainty over Brexit looking like it is about to come to an end, it is very likely that the Pound will start climbing again, although it may take a while for this to happen and it may be a bit of a bumpy ride along the way.
Investors may therefore want to take decisions sooner rather than later so as to get the most benefit from the Pound’s current weakness.
London is no longer the place to find the best returns
Putting an end to the uncertainty over Brexit may help to stimulate the London property market, but the fact still remains that it overheated massively in the Olympic and post-Olympic period and was (long) overdue a cool-down.
If you are desperate to own property in the capital, then it is still possible to pick up bargains, but you have to choose your neighbourhood with care and may have to spend some time searching for the right property at the right price.
You may even want to think a bit “out of the box”, for example by looking for off-plan property, property in need of renovation, property only (realistically) available to cash buyers (e.g. with a lease which needs to be renewed) or property being sold by an investor who is exiting the market and just wants a quick, easy sale.
For the most part, however, the best returns are to be found outside London. Even though Manchester is now very much a mature market, it still has good affordability and solid yields.
If you’re prepared to look a bit further afield in the Midlands and North (and even Scotland and Wales), there are plenty of opportunities available across all property sectors.