There are many reasons why buying an investment property in the UK is appealing to investors from overseas, particularly those within the eurozone. Dr Rohan Weerasinghe, an author, real estate investor and public speaker, claimed attractive yields, domestic demand for rental properties and less restrictive lending criteria are among the factors that draw in financiers from outside the UK.
Looking first at returns, Dr Weerasinghe highlighted the potential to find assets offering yields of between five and 20 per cent, depending on their location and the type of investment. "This is very appealing to many investors from overseas, as it provides them with a sterling-based income that can be used to support their lifestyle outside of the UK. Several of these can provide a healthy overall income for the investor," he asserted. The growing demand for rental homes in the UK is fuelling market growth, Dr Weerasinghe said, adding that funding from foreign sources is helping to boost the supply of new properties.
Earlier this month, the DTZ Great Wall of Money report revealed the UK is one of the most popular real estate investment markets among international investors, second only to the US and on a similar level to China. According to the findings, approximately ten per cent of the global capital being spent on single-country property funds was focused on the UK. The firm noted there has been significant growth in the number of real estate funds centering on just one location, commenting that this is a reflection of "the uncertainties in the market and the growing focus of funds looking at markets they know best and where they are most able to deploy capital".
DTZ also highlighted a trend among investors to plough their money into domestic markets, or other locations within their region, rather than look further afield. The data revealed that approximately one-third of all global capital in real estate markets has been directed towards assets in Europe, the Middle East and Africa so far in 2012, with the Americas region attracting a similar amount of attention.
- Wednesday 24 October 2012