Stability is UK Property’s Biggest Strength
Brexit is undoubtedly one of the most important political events to happen in our lifetime, hotly debated by both sides and with far-reaching consequences on many different aspects of the UK. However, new research highlighted in the SevenCapital Brexit Survey shows that, for property investors at least, it isn’t the major concern that headlines would suggest and UK property stability is driving inwards investment.
The global survey of high-net-worth individuals (HNWI) has found that nearly four in five (85%) of those who invest in property are currently investing in the UK, despite the perceived ‘uncertainty’ that comes with Brexit. Furthermore, 3 out of 5 of these individuals currently invest in property – an investment asset commonly chosen for its stability and potential.
Looking at a more mid-term view, 55% of our respondents believe the market will be ‘good’ to ‘very strong’ in 18 months time, a figure that rises to around 64% in three to five years’ time. These are encouraging statistics for the UK market despite the political upheaval, showcasing the stability that the sector and the investment type has to offer.
It’s this stability that makes property such an attractive prospect in uncertain market conditions. It’s no surprise that in an earlier survey we ran last year, we found that property is the most ‘aspirational’ investment, with 40% of respondents saying they’d prefer it in their portfolio, demonstrating the appeal of tangible and potentially less-volatile investments for future planners. All investments carry their own risks but property consistently delivers growth over the mid to long-term, with ONS reporting a 50% growth in prices from 2005 to the present day.
This sentiment isn’t limited to UK domestic buyers either. SevenCapital’s recent global Brexit survey, saw respondents from the UAE, Hong Kong and South Africa (SA) highlight the appeal of a stable market. For Hong Kong investors, nearly 43% prioritise UK property stability closely followed by 30% of UAE investors and 28% of SA investors.
These statistics bode well for a UK property market known for its resilience. While uncertainty can drive buying decisions in tough markets, the primary reasons for investors turning to the UK market were found to be strong yield performance (42%) and market stability (32%). In some cases, Brexit itself was a primary driver, particularly with South African investors – nearly 7 in 10 cited Brexit as the catalyst for investing in the UK market.
For investors that want to prioritise a less-volatile market for their investments, the UK property sector remains a steady choice that is currently experiencing unprecedented conditions – huge demand coinciding with nationwide undersupply creating the opportunity for good returns. Combine these investment conditions with a history of resilience and it’s easy to see why UK property remains such a popular choice for both domestic and international investors.
This article features research from Brexit and Beyond: SevenCapital’s 2019 Brexit Survey which can be found here.