09 Sep UK Ranks Among The Best Places In The World To Invest In Property
Savills says strong market conditions leave the UK as a fantastic place to invest.
The UK has long been noted as a safe haven for property investors the world over. When things all started to go wrong in the eurozone, for example, continental investors were putting their money into British property, and now that wealthy Chinese are seeing a rise in their economic conditions back home, they are increasingly looking towards UK real estate as a place to invest for the long-term.
And it seems as though this is something that could continue for some time, with a new report from Savills stating that the UK is now among the very best places in the world when it comes to the prospects for an investment in property.
Savills analysed the five-year prognosis for each of the key markets across the globe in terms of property investment and how the market will play out. It discovered that the UK is the fourth best market anywhere in the world, with its prospects coming only marginally behind the likes of the USA, UAE and Saudi Arabia.
Based on a model of household wealth, economic growth and demand and supply balance, set against a whole range of tax, policy, market-cycle and other underlying factors, the result was that the UK earns a prognosis of “substantial” growth for the next five years.
So why is the Future so bright for the UK Property Market?
According to Savills, the main factor is the sustained economic growth that the UK has been going through for some time. In 2014, for example, the GDP was at its highest since 2007 as it climbed by 2.6 per cent, meaning the British economy is returning to pre-recession wealth levels.
In addition, the unemployment rate, which continues to fall (dropping 5.6 per cent last year) and is currently the lowest in Europe, means that there’s an increasingly affluent population. This ramps up demand among both buyers and renters, making for a better prospect for property investors to make a good return on what they spend.
And, of course, there’s the political certainty which has become a factor in the past year to consider. While property prices climbed by an average of 3.1 per cent nationwide in the first six months of 2014, they remained largely flat in the second half and into 2015. This was a result of many buyers adopting a wait and see approach over the election, with little idea of how a new government may affect the sector.
However, the majority for the Conservative party has eradicated the uncertainty and galvanised buyers, restoring the fundamental demand from buyers and renters alike that has underpinned the strength of British property for some time.
Mirroring this sentiment, London-based property company, Experience Invest has witnessed an upward trend in the amount of investors purchasing UK buy-to-let property since the general election.
The Rise of Overseas Investors
Another factor that may make the UK strong for the next few years is the diversity inherent in the market. Buyers from across the world come here to put their money into property, and they often have more spending power than domestic investors.
What this means is we see demand from across the globe, which is sustained and diverse, giving it more potential to stay strong across the course of a number of years.
Looking forward, this continued stability in government, and the fact that there are such strong conditions economically should mean that the property market continues to perform well and make substantial gains across the next five years.