The steadily weakening value of sterling is fuelling increased foreign investment in UK property, where prices remain relatively stagnant. With the economic incentives already in place, how can overseas investors use a property finder to grow their UK property investment portfolios?
Overseas investment in the UK
Figures produced by the Office for National Statistics (ONS) underline the critical importance to the UK economy of foreign investment.
Although many may have believed that uncertainties about Brexit might have discouraged continued investment, in the year of the referendum in 2016 overall investment in fact increased by £796 billion, according to the ONS.
A property finder or house buying agent takes into account these broadest of economic trends as a critical background to the climate in which your property investment may be made.
Overseas investment in UK property
As within foreign investment generally, it had been thought that uncertainties surrounding Brexit may have discouraged overseas investors in property in the UK. In practice, the opposite appears to have been the case; property investment from abroad grew by 13% in 2018 – a whole 3 percentage points more than the previous year.
As far as luxury homes are concerned, the overseas appetite for investment in UK property is even greater. A recent article included figures which revealed around 300 homes had been sold for more than £10 million – a threefold increase in just a year.
While the newspaper described UK property as a “goldmine” for foreign investors, it has also made a significant contribution to Britain’s treasury. With Stamp Duty Land Tax currently collected at a rate of 12% on property worth more than £1.5 million (or 15% if it is a second home), a total of £7.3 billion was raised from this source in the tax year 2016 to 2017. Stamp Duty collected on the purchase of second homes rose by 21% to a total of £4.1 billion.
These figures are from just a few sources, of course, whereas your personal, dedicated property buying agent scours all possible sources to ensure that a finger is kept on the most up to date and most accurate trends and forecasts across the whole of the UK property market, with an emphasis on the behaviour and preferences of foreign investors.
Maximising your opportunities
A property finder is bent on maximising your opportunities in the UK property market – and, as just some of the statistics under reference have shown, those opportunities are currently abundant. They have not gone unnoticed by foreign investors, in the first six months of 2017 14% of total global property investment was made in the UK – second only to the United States.
To maximise your opportunities in a buoyant property market, your house buying agent digs far deeper than simply identifying the broad trends. When it comes to property investment, there are two factors likely to influence the choices you make – location and yield (the return on your investment in terms of rent generated and appreciation in capital value).
For high net worth individuals London continues to attract the highest level of overseas investment, with European investors alone responsible for an estimated 15% of property transactions in high-end boroughs of the capital such as the City of Westminster and Kensington and Chelsea.
Opportunities for investment in the capital have been increased by falling prices – a drop of 4.4% in the year to May 2019, says the Office for National Statistics (ONS) – and this fall, coupled with the weakening pound, has created potential bargains for overseas investment.
Indeed, in some highly sought-after areas of the capital house prices are effectively 30% lower than at their highest in 2014. Add to this the changing exchange rate in favour of foreign buyers and some – from the US, for example – might enjoy an effective discount of 50% on the prices available just five years ago.
Any property finder may tell you, however, that London is not the only place in which to invest in property in the UK – there are many emerging and established markets across the rest of the country which offer an excellent opportunity for investors.
While a fall in prices and favourable currency exchange rate continues to attract property investment in the capital, prices are still high, and this inevitably affects the yield.
Eleven of the lowest yields on property investment in the UK are to be found in the London and Greater London areas. If you are looking to maximise the return from your property portfolio, a recent survey of rental yields in the final quarter of 2018, for example, revealed that they are highest in places such as Nottingham (11.99%) and Liverpool (9.79%).
Your property finder
Your property finder has access to all of these statistics, survey results and opinions on the UK property market, of course, but gathers far more information besides.
It is information essential to homing in not just on the shape of overseas investment in the UK, the opportunities presented by the overall property market, or even regional differences in terms of location and potential yield, but particular individual property or properties in which you may want to invest and add to your portfolio.
Your home buying agent has developed an extensive network of confidential sources and contacts across the whole of the UK property market to help you identify particular properties which match your precise aims and ambitions to maximise returns.
Many of the properties which a property finder is able to identify are not advertised for sale on the open market, for example, but involve entirely private negotiations and transactions between the seller, buyer and their agents.
And the property finder does not stop there in identifying investment opportunities but cultivates and conducts negotiations with all the necessary parties involved in any transaction – your lawyers, for example, your financial advisers, architects, surveyors and local authorities.
Why choose Garrington Property Finders?
If you are an overseas buyer looking to invest in UK property, Garrington Property Finders are here to maximise the many opportunities the current market offers investors.
To find out how and the extent to which we are able to help expand your property portfolio in a productive and positive way, please contact us.