Should Emiratis buy property in the UK?
UK property prices to see steady rise
Published Friday, October 02, 2015
Investing in property has become more popular than ever before, with the chance to buy something that can offer both long and short-term profits enticing many to turn their backs on the stock markets, gold and other traditional assets.
With free visa access, easier access to finance and a strong economic footing among other factors, those from the UAE are more inclined to buying in the UK.
While property prices the world over are susceptible to economic change, the UK has consistently proven to be affected in far more muted fashion.
While the UK of old was a nation in which most people owned or sought to own their own home, Brits – and young Brits in particular – have become a nation of renters, more reminiscent of markets in the US and across Europe and the UAE.
With young people capitalising on the freedom that renting gives them, the Department of Communities and Local Government said that as of 2014, the number of owner-occupied homes had fallen to a 30-year low of just 63 per cent. At one point, as many as three-quarters would buy their own home.
In contrast, the number of people renting has swelled, and there are some 4.4 million private tenants across the UK, showing just how strong demand has become in recent years.
Savills, UK property expert, predicts that we will see steady price rises for at least the next five years. The predicted increase of two per cent in 2015 will be followed by annual growth of five per cent in 2016 and 2017 and three per cent in 2018 and 2019 meaning that heading into the new decade, prices will be almost 20 per cent higher than they were at the start of this year.
This sort of positive forecast only gives investors more reason to see British property as a feasible long-term project.
At the moment, average rental yields across the nation is between four and six per cent, which offers buyers the chance to bring in a steady level of income over the years while their property appreciates in value. At one point, as many as 70 per cent of the capital’s new homes were being snapped up by buyers from overseas.
However, the new secret in the sector is that the regions outside London are really starting to heat up.
With more businesses starting to realise that high-speed internet and ease of communication means they no longer have to operate in London, more and more are heading north and taking their staff with them, swelling demand in previously secondary cities.
The real benefit of the regions for foreign investors is that they no longer have to spend the big money they would have in London to secure high-quality assets, with prices far lower in the north of England, and they can still experience strong tenant demand and impressive rental yields.
Unfortunately, prices are not at their pre-recession lowest at the moment, but that doesn’t mean it’s not the right time to buy still.
When property prices are on an upward curve, investing as early as possible allows savvy buyers to essentially ride the coattails of success and see real capital growth over a sustained period. For anyone buying UK stock in the next few years, this is likely to be the reality, with predictions showing that the future is bright for the British property market.