UK Property Investments

Property investment is a high-risk sector offering long-term investments and significant growth, even in dwindling markets. Confidence grew in the London market in July, while London prices grew 3.1 per cent in the residential sector in Q2, mostly due to a shortage in supply (as per TwentyCi). The asking price was discounted (as per Rightmove) in August by some realtors as a late summer sale.

On average, the UK asking price was more by 1.1 per cent compared to 2017, and the cost of the most popular residential property – a two-bedroom flat- has been down since 2015. Still, the rates in London remained 2.5 times higher than the UK average (as per Rightmove's monthly index).

UK property investors are currently discouraged by high stamp duty and no inflation. Some experts believe the property rate will not increase in the coming years with low inflation. Buyers from overseas are growingly grabbing opportunities in low-cost environments, whereas foreign companies' investments are now under scan.

The acquisition by using overseas funds where the owner or beneficiary's identity is hidden has been irking authorities. Leaked Panama Papers claim foreign companies own assets valued at £7 billion, and a minimum of £170 billion in transactions took place through tax havens.

Property Markets In the UK 

Unknown property ownership has been an issue for UK property markets, where the growth in the inflow of huge funds has led to a higher growth rate and low affordability for the local buyers. In addition, many offshore organisations spend on UK properties, and the government plans to introduce laws to force owners of such properties to reveal their names. The step will help track criminal investment in UK property exchanges. 

The new regulations will necessitate declaring the owner's name or facing criminal charges, such as imprisonment and unlimited fines for people buying or selling properties in the UK. 

Due to these reasons, some growing markets have an unachievable range, and even the rents are increasing yearly. As a result, homeowners are vacating homes to rent at a higher rate.

The figures by Generation Rent show 216 households vacated tenants in the UK each week under the no-fault evictions rule (where the tenant is vacated without any ground). It led to homelessness that has tripled from approx 4580 to 16320 (from 2009 to 2017) due to a rise in rents.  

Several new buyers are looking for alternative cities to relocate to where cities like Birmingham offer low-priced houses. Birmingham became the top place for migration for people living in high-rent cities in the last two years. Investors started investing in Birmingham two years back as the capital city is becoming increasingly expensive.

Foreign investors looking for substitute regions are purchasing properties in Birmingham. The director of Savills in Hong Kong claims they sold about 100 flats in the UK in 2017, and these buyers are seeking opportunities in Birmingham that provides better rental income.

Enquiries from China and Hong Kong buyers surged more than 65 per cent in the first five months of 2018 for Birmingham properties, where about 70 per cent of the buyers are investors, and others want to own residential units for personal use. 

To know more about real estate deals in the UK, click Hamilton International Estates.