October 16, 2023

Why Do Expats Invest In UK Property?

The allure of the UK property market has consistently drawn attention from investors worldwide. But why do expats invest in UK property?

Potential for attractive returns on investment

The UK housing market has historically offered robust returns, making it a lucrative venture for many. With the right property in the right location, expats can enjoy substantial rental yields and capital appreciation.

Growing demand for rental property in the UK

With urbanisation on the rise and cities like London, Manchester, Nottingham and Birmingham expanding, there’s a growing demand for rental properties, ensuring a steady stream of income for property owners.

The current housing supply is insufficient to meet demand and has led to increased rental prices and a higher demand for rental properties. This strong rental demand ensures that expats can secure tenants quickly, minimising any potential rental void periods. Within the last 20 years, the proportion of renters has doubled with millennials struggling to afford a deposit to buy their own home, the majority are turning to the rental market (more than 30% of under-40s rent).

Rental income and capital appreciation

One of the primary benefits of investing in UK property is the potential for both rental income and capital appreciation. As long as property investors are willing to commit for an extended period (at least five years), short-term variations in property prices become slightly less significant.

There is a potential return on investment (ROI) of between 5% and 10% and a long-term expectation that property prices in the UK will increase significantly. These two key factors are part of why more and more non-UK residents are looking to the UK property market for mid to long-term investments.

Potentially favourable exchange rates

The combined effects of Brexit, COVID-19, and the UK’s political landscape have introduced periods of volatility for the GBP. While there have been moments of recovery and strength, the pound remains sensitive to domestic and global events. These currency fluctuations can work in favour of overseas investors, especially when transferring money from countries with stronger currencies to the UK.

Investing in the UK property market is achievable

The UK has a robust and transparent legal system, which provides security for property rights. This stability is a significant draw for foreign property investors who might come from countries with less predictable legal environments.

The UK is welcoming of foreign investors, there are no restrictions on non-British citizens purchasing property in the UK, however, it is important to note that:

  • Securing a mortgage can be challenging.
  • A substantial initial deposit may be required.
  • Purchasing with cash could simplify the process.
  • You are likely to face more rigorous paperwork requirements.

Market Research & Due Diligence

As with any investment opportunity, it’s vital that you do your research and due diligence to make sure that you are making a wise decision. Thorough research of local markets can help you understand regional variations, potential rental yields, and future growth prospects. It can also provide insights into local amenities, transport links, and demographic trends, all of which can significantly influence property values. Moreover, understanding the local regulations, UK tax rules, and any upcoming infrastructure or development projects can ensure that you’re not caught off guard by unforeseen challenges or costs.

Comprehensive property market research equips you with the knowledge to identify opportunities, mitigate risks, and maximise your return on investment in the ever-evolving UK property landscape.

Access to property consultants can take the stress away

Using an established and trusted UK property developer and investment consultancy firm such as Prosperity Wealth can help make the process even simpler. We have a deep and thorough understanding of the housing market, and the legal requirements of buying UK property and specialise in off-plan property specifically for buy to let investors.

Here at Prosperity Wealth, we help people with obtaining deposits & mortgages and we have picked each of our developments because they have a great chance of high rental yields and increasing prices. Your advisor will help you look at the details for each area, city, development, and type of unit and will help you understand why the location was chosen.

Off Plan Property is a great way in for foreign investors

Investing in off plan property is often a lot easier and simpler for overseas buyers for various reasons. In traditional property transactions, a chain is formed when multiple buyers and sellers are linked together because their purchase or sale is dependent on another transaction. This complicates and prolongs the buying process, just one minor delay or issue with one transaction can impact all others in the chain.

For overseas buyers, navigating this chain can be even more challenging due to potential time zone differences, communication barriers, and unfamiliarity with the UK property market nuances.

Are you an expat or foreign national considering purchasing property in the UK? Rest assured, it’s entirely feasible. With attractive prices, promising future growth, and the opportunity for impressive rental returns and capital appreciation, the UK property market offers numerous benefits.

Invest In UK Property With Our Help

Browse through our current developments to see what we are currently working on. Contact us with us via our online form or call us at +44 (0) 121 237 4610 and let us help you with your uk property investment