Key Findings for Hong Kong & South East Asia Investors Investing in the UK
Regional Cities
have emerged as prime investment destinations with high rental yields and tenant demand.
Since Brexit
Birmingham has been the top performer for property price growth within the UK.
£1.4 trillion
Worth of rental properties with five million rental homes in the UK property market.
How is UK Real Estate Market Performing? All You Need to Know to Invest in UK Real Estate from Hong Kong
Latest reports show that house prices are still increasing across the UK. Whilst the London market is stagnating and the high prices are forcing people to look at towards the wider UK – increasing demand in regional cities. Recent reports from Hometrack have shown growth in Edinburgh, Birmingham, Manchester and Glasgow surpass 7% year on year, with the UK as a whole achieving 4.4% growth on average.
As a property investor, all of this means there is still significant potential for capital growth and good rental yields. The UK is still growing, despite the uncertainty surrounding Brexit, and whilst there has been a shift in focus on residential property in the Capital in recent years, cities and areas of the UK that may once have been overlooked now present lucrative opportunities.
New Developments in the UK
Looking to invest in London for a fraction of the price?
The London Commuter Belt Options
Slough – The UK’s Commercial Hub
Crossrail is set to be a game changer in the South East for access in and out of London, and since its launch in 2009 has seen house prices within a mile radius of its planned stations increase in value by 66% on average.
Bracknell – The UK’s Silicon Valley
Bracknell should be on the radar of every investor thanks to the large-scale regeneration and global technology firms that are driving professional demand. Directly linked with the capital, Heathrow Airport and other key destinations around the South East, Bracknell is a prime commuter location that has a lot to offer working professionals looking for a thriving, affordable market.
The Growth of Regional Cities
Best Performing: Birmingham
The UK’s second city ranks as one of the most popular in Europe in which to invest – higher than London – and is currently attracting £billions of investment into citywide infrastructure projects, retail, commercial and residential space.
Global businesses such as HSBC, Deutsche Bank and PwC are choosing to relocate their headquarters to Birmingham and the city has demonstrated its global appeal by winning the bid to host the 2022 Commonwealth Games.
Using a strategy of targeting key areas for investment, Birmingham has developed the largest professional services hub outside of London, demanding the attention of both domestic and foreign investors that are looking to expand and take advantage of a much wider client base.
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Financing Your Property Investment
In terms of securing finance for a UK property, while many British high-street banks will have reduced products for overseas investors, you still have the option of visiting professional lenders. Trusted specialist lenders tend to have a wider outlook than mainstream organisations, offering better interest rates and more favourable terms. For Buy-to-Let property purchases, this will be the most common method of financing for investors.
Enquiries into the UK from Asia for expat mortgages have increased over the last couple of years, again, mainly from Hong Kong where property prices are some of the most unaffordable in the world. Skipton International saw a 65% rise in BTL mortgages from Hong Kong investors in 2018 when compared to 2016.
Mortgages for Overseas Investors
In terms of securing finance for a UK property, international investors will benefit from visiting a specialist lender. A trusted, specialist partner will tend to have a wider outlook than mainstream organisations, offering better interest rates and more favourable terms, particularly for international investors. For Buy-to-Let property purchases, this will be the most common method of financing for investors. Building a good relationship with your lender is vital, as will be choosing a partner that understands the market and products available so they can be tailored to your needs.
More specialist lenders, offering BTL finances to international and expat investors, are opening up their product offerings. While previous product ranges were more limited, many lenders are beginning to offer both fixed and tracker rates as well as interest-only and repayment options. This allows for different requirements to be met, whether a cash flow focus (fixed rates and/or interest only products) or loan reduction (repayment).
How has Brexit effected UK Real Estate?
Despite the uncertainty surrounding Brexit, the UK looks set to maintain its position as a leading investment market for international buyers.
In a recent survey by Knight Frank of 155 leading property investors, 21% of the respondents said the UK was their preferred investment market, up from 11% the year before. This is excellent news for a market that remains robust despite the political shifts over the last two years. The UK is still recognised as a strong overseas investment target, with the primary reasons for investing in the UK being potential rental yields (43%) followed by its stability (32%).
For the UK, undersupply highlights a much more pressing issue. Over half of the surveyed investors (55%) in Knight Frank’s research identified their main challenge as ‘lack of stock’ when investing in the UK, with only 15% citing geopolitical uncertainty as a constraint. These statistics all demonstrate the strength of the UK’s investment potential right now. Opportunities available are still attractive, particularly in regions that are driving new investment and redevelopment.
Fabrick Square
Birmingham
Completed Q3 2017
- Original £ per Sq Ft price: £215
- Avg Sq Ft Growth: +36%
- 1 Beds £110k – £150k = £40k (36% Capital Growth)
- 2 Beds £140k – £190k = £50k (36% Capital Growth)
- Actual Capital Growth Achieved: +36%. Avg Rental Yield: 7.7%
NOW SOLD OUT
The Kettleworks
Birmingham
Est. Completion Q4 2018
- Original £ per Sq Ft price: £282
- 2018 £ per Sq Ft price: £352
- 1 Beds £170k – £215k = £45k (26% Capital Growth)
- 2 Beds £200k – £250k = £50k (25% Capital Growth)
NOW SOLD OUT
