Political uncertainty has caused the UK economy to fluctuate in recent years and as a result it’s left a huge question mark on whether it’s a good time to invest in the UK market. However, recent data suggests that there are many investors that still firmly believe investing in the UK is their best option, with a number of those coming from abroad.
A recent study by the estate agent Hamptons international looked at the current UK housing market and found that the proportion of homes owned by landlords from overseas has increased by 4% since last year. The amount of rental properties owned by overseas investors now makes up 11% of the UK market overall.
When reviewing the regions with the highest percentage of overseas landlords, Hamptons International found that London had the highest, with 18% of rental homes being let by landlords from overseas – an impressive increase of 8% since last year. Other areas that were also popular with foreign investors included the East of England (14%), South East (13%) and the North West (12%). Like London, the East of England saw an increase of 8% and the South East and North West both had a year-on-year increase of 7%.
This is the first time in nine years that the UK has seen such a surge in popularity with foreign investors. According to Aneisha Beveridge, the head of research at Hamptons International, this trend has been fuelled by the depreciation of the pound sterling which makes it cheaper for investors to acquire properties in the UK, and although the UK government has recently introduced additional stamp duty for second homes, the low value of the sterling will cover the cost of this for someone investing overseas.
So where are these investors coming from? According to the study, it was investors from Western Europe that owned the highest proportion of properties in the UK (33%), followed by Asia at 20%. However, we saw the biggest increase of landlords from North America in 2019, where the number increased to 14% within the last five years. Thanks to the fall in the value of the pound, the average cost of a home in Great Britain costs 23% less than it did five years ago for someone purchasing in US dollars, making it a worthwhile investment for them.
It’s encouraging that so many international investors still have confidence in the UK market. Despite the current ongoing political uncertainty, the UK still offers excellent investment opportunities for both overseas and domestic landlords which should be taken advantage of.
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