The United Kingdom has something to offer everyone, from a hugely diverse and exciting cultural experience and a rich and deep history going back millennia. Ever since the Saxons and the Romans settled this green and pleasant land there has been a fierce sense of pride in home ownership. The saying that an Englishman’s home is his castle is as true today as it was it was hundreds of years ago.
This attitude has now been translated into a vibrant property market where ownership in one of the most secure property markets in the world is viewed as desirable by investors from all over the world. The desirability of the UK property market has resulted in a situation where demand has outstripped supply for decades. There is now an active interest in alternative property investments such as ApartHotels (more on that later) and Student Accommodation.
The numbers of new arrivals wishing to take up residence in the United Kingdom have also fuelled a booming property market.
Statistics show that the country’s population is expected to increase from the current 62.3 million to 67.2 million by 2020 and to 73.2 million by 2035, so those who purchase now can expect their investment to deliver exceptional long term rewards.
London remains the darling of international investors, delivering consistent returns – however there is increasing interest in areas such as the North of England and Scotland. These areas are attracting investors due to lower costs and a booming tourism industry which fuels demand for short term accommodation.
Many property pundits divide the property market in the United Kingdom into North and South due to the pricing disparity between the two regions. However this pricing disparity may work in the favour of the astute property investor. As more people choose to telecommute, rather than remain in the larger urban centres, such as London demand for property in the traditionally quieter areas is set to spike. Although prices have been dropping in recent years across the board there seems to be renewed confidence amongst realtors in the United Kingdom.
According to the UK Office for National Statistics there has been a 2.6% increase in property prices year-on-year. A typical sale now stands at USD 375,000 (£237,000). This is comparatively low when compared to some historical highs and when adjusted for inflation. Combine this low barrier to entry with favourable exchange rates and the UK market begins to look very attractive indeed.
Due to the high numbers of foreign students who flock to British shores to enjoy some of the highest standards of tertiary education in the world the British Student Accommodation market is flourishing. This is a trend that doesn’t seem set to end anytime soon. Student accommodation can also offer excellent rates of return with yields in the 7% to 10% range. Capital outlay for this type of property investment is also relatively modest.
For those who are wary of the ‘buy to let’ market due to the risk of a property standing vacant or the hassle of being an absentee landlord the increasing popularity of ‘ApartHotels’ is great news. Inessence buyers are offered the opportunity to invest in a hotel room, which is then leased back to the hotel group or owners. They then manage the rooms and provide a return on investment which is usually around 6% per annum – covering the mortgage with ease. To make the investment even more attractive investors are often allowed use of the room for a certain amount of days in the year, making this an incredibly attractive investment for the frequent traveller to British shores.
In a Nutshell
The days of ‘Cool Brittania’ seem to have come around again, especially as regards the property market. The United Kingdom has always been a firm favourite for investors, with chic London remaining an evergreen favourite. However, there are some extremely attractive alternatives for property investment in the UK. In a country filled to the brim with history and cultural attractions (and an increasingly vibrant home to some of the world’s best cuisine) it seems that savvy property investors could be riding the crest of a wave if they choose to invest now. Whether the buyer wants a cottage in Kent, A Scottish castle on the edge of a loch or trout stream, or even a lock up and go on the banks of the Thames there really is something for everyone in the United Kingdom.
As with all things investors need expert advice when making the decision to purchase property in the UK. Although the UK market is one of the most mature and transparent in the work there can be pitfalls for the first time or inexperienced buyer. Happily there are many reputable experts who can offer sage advice on property purchase on what the poet William Blake called ‘a green and pleasant land’. In fact this gentle country is even more attractive in 2015 due to a favourable exchange rate when compared to most Asian currencies.