A lot has changed for the UK property market since the heady, pre-recession days where anything seemed possible. It’s a completely different animal now, more geographically diverse and serving a variety of demands.
With the rise of Generation Rent, the decline of homebuying, the increasing popularity of city centre living and focus on accessibility, there’s no doubt the UK is still a global property hotspot and the 5th largest economy, it just looks a lot different to how it did 10 years ago.
For South African investors, uncertainty in the local investment market has meant many are looking abroad for property investment opportunities. In the UK, Buy-to-Let is a huge business worth over £1 trillion with a stable currency and huge demand, however, it can be a daunting market to join.
Bram Davies, managing partner at Sigma Property Hunt, believes: “It is important that South African buyers understand the immense opportunity investing in UK property presents – world class infrastructure, with an array of architectural and modern technologically advanced choices”.
While the focus has historically been on London, as we look ahead to 2020 and beyond, it’s difficult to ignore the power that the Midlands has on the market.
Birmingham is leading the way, building generational developments that improve the infrastructure while creating new residential and commercial space. It’s areas like Birmingham that are quickly surpassing the average 6% yield you might have previously only found in the capital.
Birmingham, in particular, is seeing incredible growth through the Big City Plan, which is forecasting an extra 50,000 jobs and an increase in the city core by 25%. As the fastest growing UK city in the last decade with a population increase of 100,000 and a further 171,000 forecast by 2039 , Birmingham is attracting global businesses such as HSBC, Deutsche Bank and PwC.
It’s not just Birmingham in the spotlight and changing the UK landscape. Affordability is also a huge factor in the ‘London exodus’, as more renters move away from the capital to these regional cores and commuter towns such as Slough and Reading.
Thanks to projects such as Crossrail building unprecedented access between commuter towns and the capital, these towns are building ideal places to live, work and play all within arms reach of London. This level of demand is most obvious when we look at prices – in the last 20 years, property in the ‘traditional commuter belt’ has increased in value by 313%.
With an economy worth £9 billion, the highest concentration of corporate headquarters outside of London and the largest trading estate under single ownership in Europe, Slough is a great example of a thriving commercial landscape ready to benefit from the rising demand.
For South African investors, now is the time to look at the UK market. Despite the uncertainty of Brexit, property prices continue to rise, the national GDP has grown and less obvious regional towns and cities are making a breakthrough, providing the opportunity for a lucrative investment opportunity.
Property also remains a long-game, offering the best returns over time. With the general consensus agreeing that markets will stabilise after Brexit, the UK suits this long-term strategy perfectly.
SOURCE: Seven Capital
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