Weak Sterling drives foreign investment

With Brexit negotiations reportedly now progressing more smoothly than when the government set out its aims and objectives, it seems that UK currency still hasn’t caught up with the negotiation process and is still somewhat lower than we might expect.

Weak Sterling drives foreign investment

It has meant that those outside the UK either coming on holiday or buying UK goods have been getting much more value for their money, and that has translated quite seamlessly into investments. Whether that’s in stocks and shares, business or property, foreign investors are finding they’re making a profit simply by exchanging their funds now rather than waiting.

Chinese and Middle Eastern investment was already high in the UK, especially in properties in areas such as London and Manchester, but now it seems that the drop in value of Sterling is pushing that investment up even further.

Research recently released by Liquid Expat Mortgages shows a 20% increase in expats investing into UK property. Reported by PropertyReporter, the research also reveals that in 2017, 60% of UAE expats and foreign nationals buying property in the UK opted for Manchester, while 25% chose Birmingham. However, London has seen a 60% drop in buyers, as a result of high property prices and poor rental yields, compared with other regions of the UK.

The results perhaps aren’t surprising given that, outside of the South East, Manchester and the Northern Powerhouse has seen the steadiest house price rises, yields and rental income.

The Northern Powerhouse areas, in particular, have been the focus of foreign investment since the announcement of billions in funding for transport projects in the region.

Not only that, but since Manchester Airport reported its flagship Airport City project, which would see a multi-million pound extension to the airport to increase its ability to accept traffic from China and the Middle East, there has also been increased attention on the area.

It is predicted that the Airport City project could increase capacity for air travel in to the region by millions per year. This would allow the area as a whole to compete more closely with the South East and, more specifically, the capital.

According to the same report, investors are also attracted by the UK’s robust legal system for property acquisition, which makes it one of the easiest places in the world to buy property.

Although Brexit negotiations couldn’t really be described as a roaring success so far, it certainly seems as though lack of progress and potential delays to a return to stability have boosted the foreign investment market.

Other cities such as Leeds, Sheffield and Liverpool have also felt the effects and most agents around those cities report a marked increase in interest from overseas. Chinese investors have certainly held a notable presence across the North West but recently more and more buyers are coming in from other areas of the globe. South Africa, Hong Kong, Singapore and the U.S are just some of the areas where consumers are currently keen on solid returns along with value for money.

It is thought that the exchange rate, should it return to normality, would spell further profits for investors who were already bought into the profitable buy-to-let market.

Regardless of the deal that the Prime Minister eventually strikes for the UK, it is difficult to see any deal that would dampen the spirits of investors.

Sheffield Guide vertical - April 2019

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