Why Invest in UK’s Real Estate Market?

13/02/18
top luxury flats for sale in London.

UK has been a favorite destination for real estate investors for a very long time. A strong and stable economy growing at a decent rate has always attracted investors from not just EU countries but from all other parts of the world. Investments in the UK have been considered safe as a house and investors have enjoyed attractive returns. After a brief period of lull and uncertainty created by Brexit referendum, the confidence of these investors is back, and they can be seen buying properties not just in London but also in other regions of the country. Even for the American investors, this is the best time to buy a property in the UK after British Pound fell to a record low level against the greenback following Brexit. These investors want to make the most of a weaker Pound to buy properties in the UK that offer solid returns.

Investments in the UK have been considered safe as a house and investors have enjoyed attractive returns.

In addition to a falling Pound, another attraction for foreign buyers in UK property market is falling home prices. After increasing continually for more than 5 years, home prices in London and elsewhere in UK, prices are either slowing down or declining. Some experts attribute this phenomenon to market correcting itself. Whatever the reason, it allows investors to buy more for less at the present moment.

However, buying a property in the UK property market still poses certain risks that cannot be quantified now. It all depends upon the appetite for risk that investors have as they search for bargain properties, trying to gain the maximum advantage of the devaluation of the Pound. These investors could find themselves ahead of the more conservative investors in case home prices start to take an upward climb once again. If you feel you can take some risk, investing in UK real estate market presents wonderful opportunities for you right now.

There is no doubt that declining home prices in UK property market can be very tempting for any investors right now. However, overreaction could make these investors miss out on attractive deals that lie ahead for them. There are many experts who feel that real estate investments are for a long period and they should not be based upon fluctuations in the value of a currency. One needs to look at the demand and supply situation in addition to the prices of properties. This could change in a year from now once a deal with EU over Brexit is announced. It is, therefore, a good idea to proceed with caution.

In addition to all the above reasons, here are some more to convince you why it is a good time to invest in UK property market

Higher returns on investment.

You can expect some of the most attractive returns on your investment in London and other parts of UK. Higher rental yields make it possible to earn profits while repaying the mortgage obligations to the lender. While this yield is around 3% for the rest of the EU, you can expect a rental yield of around 6-8% in the UK.

A strong and stable economy.

Despite all the hullaballoo over Brexit, the British economy is still the strongest among the EU countries. There is low inflation and the economy is growing faster than other EU countries.

It is indeed a good time to buy a property in the UK. Post-Brexit, British Pound has seen a devaluation of more than 10% with respect to Euro. A weaker Pound against Euro is a very attractive proposition for foreign investors as they can buy bigger and moiré properties with the same amount of money. For the fearless, this is the time for overkill as a weaker Pound gives them a lot more leverage with their own currency. Deal over Brexit remains to be cleared before 30 March 2019 but whether there is a deal or no deal, UK property market seems to have recovered after a brief period of stagnation and decline in prices.

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