Analysing Inward Investment: Which Countries Find UK Property Investment Most Attractive?

 

2020 has been a turbulent year for all of us, and that’s reflected in the stop-start UK property market. However, despite the market taking a hit earlier this year as a result of the Coronavirus pandemic, rises in property prices suggest post-lockdown demand is high and industry experts remain positive for a strong recovery over the coming months and years.

Latest figures from HM Land Registry’s July 2020 House Price Index reveal that, on average, house prices have risen 0.5% since June 2020 and there has been an annual price rise of 2.3%, which makes the average property in the UK valued at £237,963.

With England and Wales remaining a highly desirable place to buy and profit from property, I decided to complete a retrospective and look back at inward investment to reveal which nations find British property most desirable, and which areas of the country see the highest volume of foreign investment.

Could this reveal the best places to invest in property in 2021? Let’s find out.

Which Foreign Nations Are Investing in UK Property?

Newly released Land Registry data has revealed the overseas companies that own property in England and Wales. The dataset shows there are 95,878 addresses owned by foreign organisations and when analysing the countries in which these organisations are registered, the following countries appear most often:

  1. British Virgin Islands – 22,142 properties
  2. Jersey – 20,968 properties
  3. Guernsey – 12,308 properties
  4. Isle of Man – 10,647 properties
  5. Luxembourg – 2,661 properties
  6. Gibraltar – 2,406 properties
  7. Singapore – 2,093 properties
  8. Hong Kong – 1,607 properties
  9. Ireland – 1,592 properties
  10. Netherlands – 1,547 properties

Interestingly, the majority of these nations have British links. British Overseas Territories, self-governing dependencies of the UK, and former members of the British Empire all appear. All of these nations are renowned for their competitive tax systems, which means the foreign property owners could have originated in a different country but are based in these countries for tax reasons.

Other commonalities are seen in the wealth of the nations. Singapore and Luxembourg are some of the richest countries in the world and Hong Kong has the 6th highest number of billionaires in the world.

The strong transport links between the Netherlands and the UK also likely play a factor in demand from Dutch Nederlander investors.

(zoom and click the below visualilsation)

Where Are People Investing Most?

It’ll probably come as no surprise that London dominates the list of the top ten most invested in areas of the UK. However, two other major cities make an appearance:

  1. City of Westminster – 10,938
  2. Kensington and Chelsea – 5,847
  3. Camden – 2,363
  4. Tower Hamlets – 2,196
  5. Lambeth – 1,780
  6. Manchester – 1,770
  7. Liverpool – 1,516
  8. Hammersmith and Fulham – 1,511
  9. City of London – 1,372
  10. Southwark – 1360

The most popular, The City of Westminster, has had double the number of purchases as the second, Kensington and Chelsea, which has also proved considerably more desirable than others on this list. This is despite them being some of the most expensive areas to purchase property in the UK.

Financial districts and business, of course, have had an influence on investment locations too, with The City and Tower Hamlets both making the top ten list.

According to Land Registry Data, in July 2020 the average property prices in these areas were as follows:

  • City of Westminster – £894,041
  • Kensington and Chelsea – £1,249,531
  • Camden – £823,801
  • Tower Hamlets – £446,865
  • Lambeth – £527,674
  • Manchester – £179,537
  • Liverpool – £139,442
  • Hammersmith and Fulham – £769,061
  • City of London – £786,760
  • Southwark – £507,809

So, it is fair to estimate that foreign organisations currently own £9,779,020,458 (£9.78bn) worth of property in Westminster alone, and an estimated £7,306,007,757 (£7.3bn) in Kensington and Chelsea.

““Since we set up Pure in 2013, we have worked with clients across the UK and abroad to secure bespoke property finance that suits their specific project needs. “In this time, we have definitely seen some ‘hotspots’ for investment, particularly in London and the South East, along the M4 corridor, as well as cities in the North West. “Some of these areas are now becoming oversaturated and do not provide the opportunities they once did. However, others remain in high demand; high value locations will almost always hold their value and bring a solid long-term return on investment.” ”

Ben Lloyd, Managing Director here at Pure Property Finance

Are You an Overseas Investor Looking to Purchase Property in the UK?

At Pure, we’re verse in brokering international property investment deals, as well as finance for domestic property purchases, both commercial and residential, and our award wins and case studies showcase our successes. – Check out ‘Bridge Secured Despite the Borrower Being 5,000 Miles Away’.

So, whether you’re looking to purchase your first home or require funding for a new, mixed-use development, you’re in safe hands with our team. Get in touch with our experts to discuss your options and secure the competitive finance deal you require, today.

Article By Luke Egan

October 29th, 2020

Luke heads up our specialist property finance team where his focus is to drive our transactions valued between £100k and £5m.

Luke and his team manage enquiries from initial enquiry through to redemption. Luke also sits on the internal credit committee with Ben and Tom.

Luke joined Pure back in 2014 following a successful role in the Barclays property finance team that lasted over 8 years.

See more articles by Luke

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