Why is the UK's Property Market So Attractive to Overseas Investors?
So, which is better? UK buy-to-let or overseas buy to let?
That's a question, we've been asked, today, from a client, for our Question of the Day and it's quite an interesting question.
There are lots of different variables that are going to really make a difference to somebody, if they're looking at the UK, compared to any other country, overseas.
Obviously, there are so many choices to choose from. And not only at a country level but also at a micro-level, in terms of particular towns or cities.
You really want to focus on a region, you really want to focus on a given area, as well.
So, it's quite difficult to try and highlight one particular country, compared to the UK, in terms of saying, this country is delivering.
There are plenty of countries, out there, that are going to have fantastic capital growth, at the moment or really good rental yields, at the moment.
But maybe the combined fundamentals of that area isn't quite as good, as that which the UK can deliver, for them.
Everybody is different. Everybody is looking for something different, in their own portfolio.
So, the question that we were asked and our answer to that, was to focus on what the UK market can potentially offer, for buy-to-let investors.
We, typically, get enquiries from overseas clients that want to invest in the UK and certainly, we get enquiries from UK-based clients that want to focus, primarily, on the UK.
And there's a couple of reasons for that.
One, that we tend to see, very often, is because of the UK's legal system, the conveyancing process, the ownership of properties, in the UK, is relatively straightforward. It's historically structured.
People know, exactly, what the process is. They understand ownership and property title.
And it's seen as much more of a secure location, compared to many other countries, out there, when it comes to ownership and control.
In addition to the conveyancing process and legal process, there is access to finance.
There are lots of options for relatively mainstream finance. There are lots of options for commercial or bridging or development finance, as well.
But, certainly, within buy-to-let, it's a relatively mainstream marketplace. There are lots of different brokers and lots of different banks that you can speak to, to try and secure funding, for your properties.
In addition to that, it's about general, market fundamentals.
So, supply and demand. Typically, with most locations, there is lots of demand for quality, rental properties.
There are good, tenant profiles which means that your properties, if they are in a good area and maintained, to a good standard, should, typically, perform well over a longer-term, for rentals.
So, those three, key criteria are personally why I like the UK buy-to-let market.
Certainly, yields will vary across different locations. So, you will want to try and prioritise and maximise your location, for yield, if that's your criteria.
And also capital growth is going to be variable as well, in terms of locations.
But because of those underlined fundamentals of supply, demand, access to finance, the legal system, the process, which are all very well structured, compared to many other areas of the world, I, personally, like the UK.
And that's, typically, why we see a lot of people, looking at the UK, as well.
Hope that helps.