• Arda

Investing in the UK as an overseas investor!

Updated: Oct 19, 2021

While investing in the UK property market has been considered an attractive, safe, and overall profitable strategy for overseas investors, but the prospect has gotten even more attractive after the 2008 global financial crisis.

In the UK, the trend for renting property has been on the rise. With 25% of the UK citizens under 40 renting a property instead of buying, meanwhile, the real estate prices continue to soar. This fact is creating a high demand and low supply of properties. The low supply makes the UK a very lucrative market for investors from all over the world. And if the current trend continues, it is expected that almost 30% of today’s youth will end up renting into retirement.

Benefits of investing in the UK property market

Almost Guaranteed Price Increase

The UK is one of the few countries in the world that holds a rich history of regular increments in real estate value. Apart from very high-end markets, the real estate market of the UK is generally very stable. This is especially true for properties in the South East of England.

Excellent Returns on Investments

While it seems expensive to invest in Buy-to-Let properties, but the low interests guarantee a strong rental demand which translates to investors getting excellent returns on their investments. These returns are usually between 5-12% per annum on any investment.

Increase in Rental Demand

As mentioned earlier, the younger generation is struggling to come up with enough capital to invest in homes. Consequently, they are opting for renting properties. This trend has translated to a never-before-seen demand in renting properties with 25% for those under 40 who are now seeking to rent compared to those over 65 years old which is 8%.

Types of UK Properties Investment

For overseas investors, there are several options to invest in. Some of these options are;

  • Residential accommodation (traditional buy to let)

  • Government-backed social housing

  • Care homes

  • Student accommodation

  • Holiday homes

  • Fractional ownership

  • Hotel rooms

Prices of all these properties vary from each other as well as their returns and assurances. Therefore it is crucial to speak to a reputable agent before deciding which kind of real estate investment you are going to go with.

Investment Hotspots

Apart from investment types, it is important to know where you should be investing. For the UK, the hotspots are divided between north and south. While the north and midlands offering higher rental rates at lower investment rates.

The National Office of Statistics shows areas that have shown an increase in value over the past years. Some of these regions are;

  • North West: Liverpool North, Liverpool South, Crewe

  • Wales: Wrexham

  • East Midlands: Nottingham, Mansfield, Newark

  • West Midlands: Coventry, Wolverhampton

  • Yorkshire & Humber: Barnsley, Bradford, Dewsbury, Halifax, Huddersfield, Leeds

Apart from these areas, overseas investors can look into regenerated cities that offer additional residential, commercial, and leisure amenities. Moreover, newer locations like Falkirk and Kilmarnock in Scotland, Slough in Berkshire, Cleveland in North East England, and Sunderland in Tyne and Wear are becoming more and more attractive for investors.