Why International Investors Are Choosing the UK’s Silicon Valley
- The UK’s Silicon Valley is growing two times faster than the wider UK economy, attracting the world’s top technology firms
- Thames Valley area has one of the highest employment rates in the UK at nearly 80%
- UK investment levels are nearly 1.5 times higher than Germany and 2.6 times higher than France
- Bracknell is forecasting a 15% rise in population by 2036, one of the fastest increases in the country
- Download your free UK Silicon Valley Guide here
At a time when the UK is securing its position as the leading target market for international investors, there’s no doubt that the UK’s Silicon Valley is at the top of wish lists across the globe.
Despite political shifts over the last two years, the UK is still recognised as a strong investment market, noted for its stability and potential for excellent rental yields from regions such as the UAE and Hong Kong.
As the UK tech sector accelerates two-and-a-half times faster than the wider economy, the M4 corridor – nicknamed the UK Silicon Valley – has directly benefitted. Home to the world’s top technology firms including Microsoft, IBM and Oracle, the growth the region has experienced over the last 20 years has helped it develop into one of the most lucrative investment opportunities in the country.
Attracting global brands and millions of pounds worth of investment, it’s no coincidence that this UK tech hotspot is presenting itself as an affordable alternative to the capital. With infrastructure improvements driving increased accessibility, the region is developing and enhancing connectivity to an unprecedented level.
This level of improvement has brought with it a dedicated and ambitious workforce. Nearly 80% of the Thames Valley area is in active employment, with 55% of that total occupying senior Managerial or Directorial roles – demonstrating the professional pull that employment opportunities in the region offer.
UK Top Target for Investment
For investors, this represents the opportunity to take advantage of the rising tenant demand looking for smart, forward-thinking office, retail and leisure spaces as well as enhanced employment opportunities. With the UK recognised as one of the most ‘promising countries in the world for technology breakthroughs’ according to a 2019 study by KPMG, this puts the UK Silicon Valley, and the wider country, firmly in the spotlight for foreign direct investment (FDI).
UK investment levels are 1.5 times higher than Germany and 2.6 times higher than France at the time of writing, while over $7.7 billion was invested in UK startups during 2018. This incredible amount of money, most of which was earmarked for London and UK Silicon Valley businesses, reflects the support and enthusiasm of public and private bodies within the South East.
Key locations such as Bracknell and Reading are cornerstones of the UK tech sector and have utilised this inwards investment to drive large-scale regeneration projects, creating quality residential and commercial spaces while improving local amenities such as shopping centres and leisure facilities.
Bracknell is a prime example of this regeneration transforming the landscape, using its foundation as a hub of technology with businesses such as HP, Dell, Honda and Fujitsu to attract a professional young workforce. With Bracknell forecasting a 15% rise in total population by 2036 – one of the highest in the country – it’s no surprise that both savvy investors and developers are taking note of the ‘UK’s Silicon Valley’ and it’s emerging market .
UK Residential Undersupply
The wider problem the UK is facing is a chronic undersupply of property. There is a shortage of residential property to meet the young, growing demand – a problem if you’re looking to buy a home but favourable if you own or you’re looking to own an investment property.
While economic growth is strong in areas such as Oxfordshire, the West Midlands and the North, residential undersupply is a huge issue plaguing the entire country. 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.
A third of respondents (36%) to the same survey believe that UK demand will increase, while around a quarter (23%) believe it will remain steady. For the majority of investors, a competitive market is expected going forward as undersupply makes premium property lucrative.