Savills estate agent has named the UK as the fourth most attractive place in the world to buy residential property as an investment, which could have a knock-on effect for the average househunter.
The estate agent took a number of factors in to play, including the rising house prices that make UK property an attractive investment. The study focused on the potential returns from rising prices and also from rental yields, as well as a number of other socio-economic factors that could influence the property investment market in the years ahead.
Savills revealed that the USA is still the best place for international investors to put their money, followed by the United Arab Emirates and the Asian economic powerhouse that is Singapore. The UK, though, holds a solid fourth place and is the best place in Europe to put your money.
That is, in part, due to 20% growth in property prices since the depth of the crash in 2008. Savills’ world research claims that a steady move towards renting, rather than buying, a growing population and an impending shortage of houses, which could occur at any point in the next seven years when land supplies also run short and new housing simply cannot be supplied fast enough to meet the inevitable demand, means that property prices should enjoy another surge.
Of course the study cannot cover every eventuality. Interest rate rises are almost certainly on the way and that could have a knock-on effect on the housing market. Decades of stability, though, together with the British government’s traditional support for the housing market, mean that foreign investors continue to see the UK, and England in particular, as a solid investment that should provide better returns than most nations in the world.
Interest in UK property has increased in recent weeks, thanks to the serious problems faced by the Chinese stock exchange prompting many of China’s richest individuals to seek other forms of investment outside of their home country. Russian investors have also taken a heavy interest in the British property market, especially the more upscale areas of London, after their domestic markets took a serious dive in recent years.
The relative strength of the British pound, coinciding with a serious fall in the Chinese Yuan and the South African Rand, means a variety of countries are looking to the UK as a place to invest or even move to. Political stability, the ease of acceptance compared to countries such as the US and the multicultural nature of major cities like London mean that many foreign investors are not just putting money into the UK, they are moving here permanently.
The UK has always been popular with investors from the UAE, too, as they seek a diverse and international property portfolio and a place to call home during the summer. The traditional investors have been joined by a wave of new money, though, which is flooding into Britain and finding its way to the premium property market.
The Savills’ report will only increase the interest in the UK as a property investment hotspot.