The Enduring Appeal of UK Real Estate for Foreign Investors

Photo by Bongkarn Thanyakij on Pexels

‘Safe as houses’ is a well-known saying in today’s vernacular, however the term is relatively old, emerging from Victorian Britain. The phrase is said to have become widespread during a period of particular economic volatility, when an overheating railway industry bubble burst, leading people to fall back on real estate. While the term should not be taken as gospel (or as investment advice!), the strength and appeal of UK real estate on the global stage suggests there is indeed something behind this phrase.

As of late, you may have heard of grim predictions for UK property in the face of shocks such as Brexit and the Covid-19 pandemic. Both of these events have tested the confidence of domestic and foreign investors alike when it comes to deploying their capital in the UK, seemingly dominating the investment outlook. Nonetheless, recent data has shown our domestic property market to be remarkably resilient in the face of significant economic and political turmoil. Simon Glenn of BNP Paribas Real Estate points out that a significant proportion of international demand is focused on London, noting that £9.3bn was deployed by overseas investors for the purchase of property in 2019.[1]

The reasons for UK property’s resiliency in the face of current uncertainty are not simple to pin down, and can ultimately be seen through both internal and external viewpoints. The UK has a lot going for it as an investment destination due to its strong institutions and governance, high quality education system, as well as the fact that it remains one of the world’s top financial centres. With a long-term investment such as real estate, these factors remain worth considering for an investor from abroad, especially if the investment is being made for job or family considerations.

Moreover, the pound sterling has seen persistent weakness against peer currencies, making property purchases better value than ever for investors from other countries. The recent cut to stamp duty has also intensified interest from abroad. Andy Foote, Director at SevenCapital suggests that ‘ahead of the April 2021 date we are likely to see a heightened interest or sense of urgency, particularly in the UK’s prime residential markets, as investors seek to secure their investment ahead of time and avoid paying the extra stamp duty.’ [2] In short, it appears that property is in an economic ‘Goldilocks zone’ when it comes to currency performance and policy measures, creating good conditions to capitalise on foreign demand.

Foreign investors are also being prompted to make purchases of UK property due to an intensification of political instability in certain regions, as well as an attempt to find a ‘safe-haven’ from growing volatility within other investment classes such as equities and fixed income. Thus, in spite of any issues seemingly posed by Brexit, the UK still retains its appeal as a stable and accommodating destination for investment.

Here at Yielders, we are proud to count investors from over 30 countries in our investor base, and we hope to be able to spread our product further as we grow over the coming months and years. You can become an investor with us from most countries* subject to passing our background checks, making it easier than ever to invest in UK property, from as little as GBP100.

*For a full view of nationalities permitted to invest with us, please consult http://help.yielders.co.uk/en/articles/3436163-investing-from-abroad.


[1]Source

[2]Source

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