Overseas investors remain confident in UK property market
12 Jun 2017
Fears that uncertainty following the vote to leave the European Union would stunt overseas investment in the UK have proven unfounded with respect to Asia’s interest in the UK property market. Despite concerns surrounding Brexit and what it will mean for the UK’s position as a global player, recent data suggests that Asian investors are pumping more money into the UK property market than ever before. In fact, these investors accounted for 28 per cent of the transactions in the market last year – a significant jump from the 17 per cent they accounted for the previous year (JLL).
It seems that Asian investors’ confidence in the enduring strength of the UK’s property market – its ability to bounce back from the disruption caused by uncertainty around Brexit and the General Election – is the driving force behind much of this overseas investment. While much of this faith rests upon overseas investors’ perceptions of London as a safe bet with guaranteed returns, many Asian investors are realising the value that resides in other UK cities – particularly those within the Northern Powerhouse.
In fact, the international property portal Juwai.com suggests that interest in Manchester-based property from Chinese investors has grown by 50 per cent, largely due to growing enthusiasm for the Northern Powerhouse and the launch of direct flights from Manchester to Beijing. Many of those travelling between China and the UK are finding that Manchester is fit to rival London in terms of investment opportunities, as a result of its global accessibility, booming economy and competitive property market.
Additionally, the weakening of the pound in the wake of the country’s decision to exit the European Union and its subsequent tide of uncertainty has also made the UK an appealing choice for overseas investors looking to make the greatest return. Chinese investors have been the biggest buyers of property in the UK in the past year, with Juwai.com stating that enquiries from Chinese investors into the UK property market have increased by 60 per cent in the past year.
The dip in the value of the pound combined with the soaring property prices in cities like Manchester, Birmingham and Nottingham have meant that overseas investors are able to get a great deal for their money in the current climate, and many are taking advantage of the opportunities this provides to supplement their incomes or enhance the value of their portfolios.
While uncertainty has been prevalent in the UK since the decision to trigger Article 50 – something that the markets do not care for – it is apparent that overseas investors still see the UK as a safe and lucrative place in which to purchase property. And more than that, they are beginning to cast a wider net over the country when searching for current property hotspots, seriously considering the higher yields that cities like Manchester can offer in comparison to the currently stagnant London-based market.
For more information on investing in the UK property market, either as a local or overseas buyer, contact one of our private client managers today on 01483 230 430 or at firstname.lastname@example.org.