There has rarely been a better time to invest in European property. This holds true for anyone but is especially true for those of us who live in countries that have fragile and volatile economies and where the risk of sudden moves in the exchange rate, is high.
Value For Money: From the date the UK announced a referendum on the issue of Brexit, until the time the “Leave” vote won, the pound was on a downward trend against the other major currencies. With the result that the exchange rate with the Rand is today at the same level as it was 5 years ago. Brexit also had the effect of causing UK property prices to stagnate and even decline in some places. And with the EU having had to tackle a series of debt crises and struggling to show growth, the Euro/ZAR rate is now at the same level as it was 4 years ago
Buoyant Rental Market: Think it is only in unaffordable London where demand for rentals exceeds supply? Think again. For many years now, the UK has not been building sufficient new homes to meet demand. Added to which, the banking regulations that were imposed following the 2008 economic crisis, have caused bonds to be out-of-reach for large numbers of would-be first time buyers who cannot raise sufficient funds for the minimum 25% deposit.
Available Financing: There are not many places in the world where you will find banks and building societies prepared to offer Buy-To-Let mortgages to non-residents, but Europe is one of them. Leveraging your purchase with a mortgage has many advantages when it comes to cash flow, minimizing capital flight and protecting your European tax base. And in most cases, a 65% mortgage will still allow you to be net cash positive from the first day of letting.
We offer 2 x ways of finding the property that is right for you:
Off-Plan: The investment/development companies that we represent, use their financial muscle to buy up (almost) entire developments at the planning stage, and then sell off the units prior to them being completed. They conduct due diligences on the developments that they buy, with a rigour and attention to detail that are greater than any individual could achieve. This gives clients the comfort of knowing that they are very likely to give above average rental returns and above average capital growth. They invest in cities across the entire UK and they can offer properties from an entry-level price of around £146K, all the way up to £1.0m. Every chance therefore, that they have something for you.
D-I-Y: The off-plan model doesn’t suit everybody; some clients are nervous about buying off-plan, some do not want to wait 18 – 30 months before their asset is ready to be rented, some cannot stretch to the minimum price (currently around £150K). For those clients, we can guide and advise you as you choose your property, make an offer, conduct viewings, apply for a bond.
Once we know your budget and your investment objectives , we can advise on the type of property you need to be considering, where you need to be looking and what to expect in terms of cash flows and returns.
We can conduct viewings on your behalf, we can connect you to a broker who is experienced in obtaining Buy-To-Let mortgages for non-residents.
We can advise and support you throughout the process of finding and buying your property, and beyond. We are able to offer a full suite of property management services from finding you a tenant to completing your tax return.
While London plays a big part in the UK residential market, it’s not the only spot. According to Savills, the total value of the UK market is estimated to be around £5.75 trillion. Of this, London accounts for just under £1.5 trillion – that’s around a quarter of the market.
That means there’s a market out there, beyond the capital, worth £4.25 trillion to be part of.
Traditionally, the UK has always been seen as a nation of homeowners (remember Maggie Thatcher and how she made council houses available and affordable to the occupants who had been renting them?), whilst their continental European cousins had a preference for renting. But that no longer holds true.
25 years ago, 65% of those aged 25 - 34 and who were middle-income earners, owned their own home. 4 years ago, that figure had dropped to 27%!
The UK's National Housing Federation found that there was a shortfall of 4 million homes in England and recommended that 340,000 new homes be built every year in order to tackle both current and backlog demand.
In 2017/18 however, England's housing stock increased by only 220,000.
Location, location, location goes to old maxim – and it’s one that still holds true in the UK residential market. In 2016, a study from Lloyds found that living near a Waitrose supermarket can add £38,666 to the value of your home.
(Good news for investors looking at Wellington Quarter)
Green spaces are also important, especially in big cities. In London, every hectare of park space within 1km of a house boosts prices by 0.08%, according to a Greater London Authority report.
The UK's Land Registry data shows that in the 20 years from 1999 - 2019, the average price of a UK house increased from £75,995 to £226,234.
If house prices had tracked inflation, the average price of a UK house today, would be £129,372.