Published: April 11, 2021

Buying UK Property Investments – A Guide For Overseas Investors Part One

Written by Amber Furr
New UK Rental Market Report Highlights Regional Differences.
Overview

Overseas investors in UK property have one thing in common – they have all recognised the considerable benefits of investing in UK bricks and mortar.

While savvy foreign investors have been taking advantage of investment opportunities in the UK for many years, some investors out there may still find investing in foreign property difficult. Select Property Group has put together this two-part guide for overseas investors who are interested in buying UK property investments.

Summary of overseas investment in UK Property

As an investment destination, the UK has held itself in a strong position for many years and has developed a reputation for being a popular place for foreign investment.

Overseas investment in UK residential property has remained high for so long for several reasons:

  • The supply and demand levels for housing in the UK are dependable, with the current trend being growing city centre populations boosting rental demand.
  • There is an established and well-respected protected legal framework for UK property buyers, whether from overseas or otherwise.
  • It is considered to be very politically stable, and the UK government has consistently reinforced the strength of the property market.

In 2019, UK Prime Minister Boris Johnson stated that the number of UK foreign direct investments was at an all-time high. Despite the difficulties caused by Brexit and COVID-19, the UK property market continues to be robust and has emerged in 2021 as one of the most secure investments available in the world.

Is UK Property A Good Investment For You?

UK Property investment has been a secure avenue for people who are in a financial position to invest for a considerable number of years. It is an established and often lucrative way to maximise and safeguard your money.

Property itself is quite appealing thanks to the traditional adage of investing in something ‘real’ rather than stocks and shares. Most people like the concept of actually owning something tangible, and UK bricks and mortar is certainly that.

Overseas investors in UK property have long recognised why there are so many advantages to investing in this market. If you are new to the investing ‘game’ then you may not realise why the UK property market could be such a good investment for you.

The main thing that a good investment opportunity needs is supply and demand. The UK property market has got this in spades. The growing population in the UK is higher than it has ever been before, and all these people need a place to live. Queue the fast-paced housing market!

A steady stream of eager tenants means that rental yields are particularly high in the UK and this in turn leads to strong long-term capital growth. Both of these factors are music to the ears of any budding overseas property investor!

Demonstrating that the investment opportunities in the UK aren’t going away any time soon, a recent survey of 500 high-net-worth investors and asset managers by law firm DLA Piper found that the UK was a top global property investment ‘hotspot’. 33% of respondents even stated that they wished to invest in UK property during 2021.

If all of these seasoned investors are set on investing in UK property, then it certainly is an avenue worth exploring for newcomers to the market!

Best Property Investment Cities In The UK

It used to be that investing in UK property as an overseas buyer meant one thing – London!

However, when market experts now look at where is best to invest in the UK, the regional cities outside of the capital are becoming increasingly appealing.

This is because, prices in London are no longer ‘booming’ as they once were, and much better value can be found in the regional northern and midlands cities.

These areas are emerging as real UK property investment hotspots with more opportunities on offer alongside high yields and strong demand. You would be a short-sighted investor indeed if you did not look more closely at these alternative property investment opportunities that can be found.

Let’s have a closer look at three cities as possibilities for where to invest in the UK – Manchester, Birmingham and Leeds. All of these cities offer huge opportunities for overseas property investors, and all come with their own unique features and qualities.

If you invested in London property shortly after the 2007-2008 financial crisis, you would have made a considerable profit on your investment. But now London has hit an affordability ceiling, investors are looking to diversify their portfolios in cities with lower price points and higher yields, such as Manchester, Birmingham and Leeds.

Adam Price, CEO at Select Property Group

Manchester

Manchester has become the go-to destination for overseas property investors looking for a different opportunity in the UK. In 2018 alone foreign investment in Manchester property increased by 200%!

This is for a number of reasons: The city has undergone extensive regeneration in the last decade, it has a thriving student population, and the BBC has moved their headquarters to Manchester, opening up a new wave of employment opportunities for young people chasing a media career.

Birmingham

Birmingham is another of the best UK property investment areas and is the country’s second-largest city next to London. It is becoming increasingly prevalent on the radars of overseas property investors thanks to its growing population, major international airport and fantastic transport links.

The city’s thriving business scene can be credited with much of its recent surge in popularity with banks such as HSBC and Deutsche Bank choosing the metropolitan for their headquarters. This is driving young professionals to the city in droves, and with it they are bringing their desire for high-quality rental homes.

Affinity Living Birmingham has been widely welcomed by the market during the pre-launch sales phase. This purpose-built residential rental property consists of one and two-bedroom apartments and is perfectly targeted at young professionals currently seeking their fortune in the midlands.

Birmingham Property

Leeds

Leeds is relatively new to the property investment scene for overseas investors, but it is certainly worth a mention. It is one of the biggest cosmopolitan cities in the UK and the Leeds city region is the UK’s second-biggest economy after London.

Not only this, but it also has a flourishing tech industry that is worth an estimated £1 billion. It has been hailed as the ‘digital capital of the North’ and is becoming a sought-after alternative to London for tech entrepreneurs who are looking to capitalise on the future of this thriving industry.

The city is becoming known for its supportive network for start-ups, its innovation, and its digital and creative prowess. These factors alone are enough to be attracting young renters into the city and it cannot be ignored by overseas property investors any longer.

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