The UK has long been a destination of choice for investors based in the Gulf Region. There are several key reasons why it is such a popular location; its proximity to the Middle East when compared with other English speaking countries such as the US, its highly respected banking sector and both the judicial and financial systems are deemed to be fair.
Overseas investors wanting to invest in UK property might not have excellent geographical knowledge of the country or monitor the news closely to know of local market trends. This can make it challenging to know where to invest and what type of property will present the best investment opportunity.
Looking at what and where UK investors are buying can provide international investors with useful insight as to where they should be focusing their interest.
Follow the rental demand
The demand for properties to rent in the UK is higher than ever before. The continuously growing requirement for high-quality rental accommodation is ensuring there is a steady stream of tenants.
Rental demand is highest in the places where the economies are growing, there are several key cities in the UK which are facing a deficit of suitable rental property for the workforce.
Locations such as Manchester and Birmingham are such cities; their economies are growing, the workforce is becoming increasingly skilled and affluent tenants are seeking quality rental property in increasing numbers.
Birmingham
The UK’s second city is seeing a continued wave of investment and regeneration, largely driven by the exceptionally fast pace at which the local economy is growing.
Birmingham’s greatest appeal is in its geographical position – virtually in the centre of the UK making it relatively easy to reach every other business centre in the country. It’s connectivity and the ongoing improvements to the city supported by the local government make it an exciting prospect for investors seeking high yields and strong supporting factors for capital growth.
Manchester
Both UK and international investors have focused their attention on Manchester for several years. The city continues to present excellent opportunity, it’s economy continues to grow as more and more corporate businesses move their operations to the city or open a base there, Manchester also sees a high number of start-ups year on year.
The local infrastructure and transport network are second to none making it an ideal location for companies to operate from and use as a base in the North. Manchester airport greets flights from over 200 cities including Dubai, Mumbai, Beijing, Hong Kong, Singapore and San Francisco. There are also 60 trains per day which travel between Manchester and London and the journey takes only 2 hours. By road Manchester is also very well connected with an excellent motorway network making it easy to reach Liverpool, Birmingham and Leeds.
These factors contribute towards the high demand for quality rental property. For landlords who prefer investment in well-established locations Manchester is certainly a hotspot.
Where are UK investors buying property?
Lesser known investment hotspots are attracting a great deal of attention from UK investors.
Those based in the UK are surrounded by useful information presented in the news; whilst the stream of updates are not always specific to real estate it is often relevant to property investment due to the large impact both economic growth and infrastructure have on local property markets.
Understanding the transport systems and planned improvements to infrastructure across the UK and learning where important companies are opening or closing offices, factories or warehouses will all mould and shape an investors decision making.
Overseas investors will have access to this information but will have to go and look for it which can be incredibly time consuming.
So where are the UK investors buying property?
Wolverhampton
Wolverhampton presents one of the most exciting prospects for UK property investors. This little known location is slowly featuring on international investors’ radars, up until recently it was a location only those ‘in the know’ were focusing on.
With so much investment being poured into the city, regeneration and improvements to infrastructure are taking place at an impressive rate. One of the city’s top selling points is its connectivity to neighbouring Birmingham. The train journey from Wolverhampton to Birmingham takes only 16 minutes yet the property prices are considerably lower.
One of the largest sources of tenant demand in Wolverhampton is from the Birmingham work force. With Birmingham’s economy supporting Wolverhampton’s own growth the city has potential for impressive capital appreciation and offers high rental yields to landlords.
To read more about why we think Wolverhampton is such a great location for investment and why so many UK investors are purchasing rental property here read our article on the topic: Why invest in the Wolverhampton Property Market.
What type of property?
It might have previously been the case that UK property investors were heavily involved with their investment properties and in many instances will have managed the property themselves. There are now many rules that must be followed protecting both the landlord and the tenant and landlords now usually choose to employ the services of a management company to ensure everything is conducted correctly.
With these changes UK investors have been increasingly drawn to properties that are purposefully built for renting meaning they are built to a high standard and each individual unit fulfils the necessary requirements set by the bodies overseeing rental property in the UK.
With a newly built property and one that is fully managed, a landlord can take a very hands off approach and allow the property to work well, as an investment asset should, without surprise costs from leaky roofs, broken boilers or dated and poorly working kitchens.
UK investors are increasingly focusing on off plan opportunities and in particular new developments purposefully built for renting and where a management team will be in place. There is also an appeal in rental assurances which offer security and allow landlords to plan finances clearly.
Invest in UK property
To discuss your plans for property investment and learn more about what and where UK investors are buying properties please do contact our Dubai team via email at dubai@thirlmeredeacon.com.
