Overseas investors cash in on the UK property market?

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With house prices in Australia reaching unachievable highs, the British pound and UK property market provide an enormous opportunity for Australian property investors.

Lower entry points, high rental demand, strong yields and a plummeting pound make the UK an overseas property investor’s paradise.

Since Britain’s EU referendum, the volume of property sales to investors from the Middle East, Asia and the US have increased 15%, 10% and 3% respectively. The pound has plummeted to its lowest value against the US dollar in 31 years, attracting global interest to the market.

The average Sydney house price shot from $533,000 in 2011 to the current $970,000, increasing 92.4% since 2009, according to the Financial Times. Whilst Sydney leads the charge as is not representative of the nation as a whole, four of the eight Australian capital cities have also appreciated by at least 10% year-on-year.

This has created an entry point that is unreachable for the regular investor, especially considering demand levels far outweighing available supply. Equally, those who can afford to invest are gambling on properties maintaining their value, let alone long-term growth.

The British housing market has remained resilient in turbulent times with high demand maintaining growth nationwide, despite London’s comparatively poor performance.

With domestic investment remaining modest at best, a substantial proportion of the growth is attributed to overseas investors, capitalising on the weakness of the pound and yields that are hard to come by in other property hotspots.

This Is Money’s recent report identifies an average 7% yield across the north of the UK and 6.4% in the North West, which has a particularly high attraction to overseas investors and is home to Manchester - which boasts an 8.8% average for year-on-year capital appreciation.

With the Australian dollar starting to tumble and losing ground on a number of other currencies, Britain must surely be host to one of the most attractive property markets worldwide for Australian buyers.


Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.

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