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September 29, 2018

Why Are So Many Overseas Investors Choosing UK Properties?

The UK is an excellent choice for overseas investors. With its robust housing market, friendly tax and legal environment and a long history of successful investments, it continues to appeal to a variety of investors from around the world. 

Recently, there have been some impressive statistics which emphasise the UK’s lasting appeal to overseas investors. In 2017, foreign investment into property in the UK rose to a record £30.8bn. This impressive figure shows that the level of interest in the UK property market remains strong despite economic uncertainties. In fact, international investment in UK property has been increasing year on year, with a shift towards regional cities. These increased levels of investment in UK property are having a dramatic effect on the economy, and overseas investment is now a major driving force in the growing UK property market.

For investors from other countries, one appeal of UK property investment is the country’s openness to foreign investment. With its standardised market and legal system, the UK can offer a streamlined investment process. Compared to other countries like Italy and Germany, it is far easier to register a property in the UK. It also has an internationally competitive tax environment, boasting the lowest corporate tax in the G7. The UK’s corporate tax rate was reduced from 28% in 2010 to a current rate of 19%. This low tax rate is, of course, another appealing reason to invest in the UK.  The UK has also remained friendly to foreign buyers through legislation, with no restrictions on foreign investment and no regional variations in law. This is a stark contrast to other countries like Switzerland and New Zealand which have taken measures against foreign investment. 

The fall in the pound has been another key factor in increasing levels of foreign investment. Overseas investors are finding that their money goes far further than it used to and with such affordable prices in some regions of the UK, this can make a significant difference to return on investment. Property prices in certain UK cities are considerably lower than other European alternatives and this allows investors from diverse backgrounds to enter the property investment sector. 

Overseas investors are becoming increasingly smart about where they invest in the UK. Whereas in the past foreign investment was focussed towards London, investors are now looking further afield for new lucrative investment opportunities. There has been growing overseas interest in regional cities in the UK which are undergoing significant regeneration programmes. Cities with impressive rental yields like Nottingham and Hull, which were once an unknown quantity for international investors, can now be searched online, with detailed property reports and even satellite footage available at the click of a button. New technology and global connectivity has brought more access than ever before to information about the UK property market, allowing investors to gain more information about potential property locations.

Investment properties in regional cities like Liverpool and Manchester are providing investors with incredibly high yields, and a growing rental demand means that tenants are queueing up for high-quality rental property. Property firms like RW Invest can provide overseas investors with lucrative investments, assured rental periods and expert local knowledge. Established and reputable companies like this can offer foreign investors exceptional customer service, client care and around the clock contact so no matter what time zone investors are in, they can talk to someone about their potential investment. 

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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