Why is the UK property market so attractive to international property investors?
April 10, 2023
This week, we're going back to basics to look at why buy-to-let property investors from across the globe want to own UK investment property. What about the UK market specifically that continues to attract global investors?
The UK offers a safe haven for investors' money. Highly regulated, legally, and economically stable, the UK and its economic institutions are seen as a safe bet. This defines the game's rules, making a level playing field for all.
But there are many countries of which you could say the same – so what else is it about the UK?
The crux lies with the laws of supply and demand: "The prices of homes, like those of stocks and bonds, depend heavily on the law of supply and demand. More demand, prices tend to rise; more supply, they tend to fall." (Investopedia)
In the UK, the supply of homes remains well below demand.
The most acute shortages are felt in London, in and around Birmingham and Manchester, as well as in university towns and cities like Oxford and Cambridge. At our recent seminar on the current state of the UK market, we heard UK developer Nick Harvey-Jones saying that developers physically can't build enough property to supply demand because of a lack of labor, planning constrictions, and space.
The UK's tightly regulated marketplace – of strict planning laws and protection of the greenbelt around cities, also inadvertently means that demand continues to outstrip supply.
Thus we see, at the moment, rents going (for want of a better word) bananas, making the property a safe asset class that currently offers a better hedge against inflation than any other asset class.
And with the exchange rate so favorable to international investors since May 2021, UK buy-to-let property is available at a discount to buy-to-let investors who can purchase in dollar-pegged currencies.
Which is why, the UK presently offers, arguably, the best buy-to-let property to invest in.
Top reasons to invest in UK property
· Strong legal system
· Invest with as little as a 10% deposit
· Competitive mortgage deals for non-UK resident investors
· Currency play for dollar pegged currencies gives up to a 30% discount
· The UK has a newbuild housing shortage with demand far outstripping supply; sending rental income soaring
· Highly regulated property market ensures quality of product
about the AUTHOR
RICHARD BRADSTOCK
RPA’s founder, Richard has worked in residential development investment for 20 years and oversees the general running of the business ensuring the RPA Group retains true to its founding principles. Over his career Richard has built an incredible network of international property investors and like-minded industry professionals. The RPA Group was born out of a duty of care to provide property investors with an industry-leading and integral service, one that connects investors with quality and desirable investment opportunities, whilst providing reliable and trustworthy market commentary and analysis alongside, enabling investors to make the best, most-educated decisions for them.