UK property is a stable, profitable investment market that keeps getting more and more popular. Investors from around the world have enjoyed the benefits on offer for many years – but what if you’re just getting started?
There’s a lot of important information that you need to know before you invest. Most importantly, why should you invest in the first place?
This guide for overseas buyers includes everything you need to know about why UK property for sale is the world’s number one investment market, and what it can offer you as an investor.
UK property is a stable, predictable investment
There are many types of investment you can make. Stocks and shares, precious metals and luxury items are just three of the options. However, none of them offer the same stability and predictability as UK property.
While the global economy can have a major effect on other investments, the underlying conditions that make UK property so stable and secure are much more resistant to change.
The basic fact of the market is that there are not enough homes to go around. The UK has a shortage of approximately 4 million homes according to the Centre for Cities. We would need to build 442,000 homes per year over the next 25 years or 654,000 per year over the next decade in England alone to close that gap.
The new government is targeting 1.85 million new homes over the next five years, or 370,000 new homes a year. However, in reality we are currently building just over 210,000 homes a year. Even if that number can be increased by 150,000 a year to get close to the new target – which has been branded ‘unrealistic’ by local councils – it still wouldn’t be enough to meet demand.
That means that the demand for what homes there are will keep increasing. More demand means increased competition, and that means higher prices.
House prices to keep growing over new property cycle
The lack of available homes and the overwhelming demand for property in the UK means that house prices are likely to keep going up. In fact, we are at the start of a new property cycle and the next four year period is likely to see property values grow significantly.
Capital appreciation – the amount a property’s value increases in the time you own it – is one of the key benefits of UK property for overseas buyers.
The huge demand for housing is pushing house prices up at the fastest rate for two years right now. In the future, that trend is likely to continue.
JLL’s residential forecast shows that house prices could rise as much as 17.6% by the end of 2028. Analysts from Savills are even more positive and predict that the average UK house price could grow by as much as 21.6% over the same time period.
With that in mind, buying now at the beginning of this cycle is an extremely savvy move for overseas investors.
UK rents are also increasing
The second reason for overseas buyers to invest in UK property is rental income. Unlike capital appreciation, this is a regular monthly income that offers returns over the course of your investment.
Much like house prices, overwhelming demand for rental properties in the UK means that rents are going up all the time.
The latest report from the Office for National Statistics shows that the average UK rent has increased by 8.4% in the last year. Rightmove data from October 2024 confirms this, stating that UK rents are now at their highest ever levels.
Almost 20% of all households in the UK are now in the Private Rented Sector and that number keeps rising. That means that rental income is likely to keep growing in the future. Savills anticipates that rents will be 21.6% higher by the end of 2028.
In markets like the North West and Yorkshire, growth is meant to be even stronger, making locations like Manchester and Hull ideal investment destinations for overseas buyers.
Hands-off investment
Finally, UK property is a hands off investment that requires very little time and effort. An experienced management agent can be appointed to take care of renting, maintaining, managing and administrating your property.
By doing so, you remove all the hassle that comes with being a landlord while still being able to enjoy all the benefits of a growing, thriving market.
This passive income strategy is the third pillar that makes UK property such an appealing investment for overseas buyers.
This is especially true if you buy UK property off-plan from a reputable developer. With this type of property, a management agent will be appointed before completion and they will start work to rent your property out before it is completed.
Want to learn more about UK property investments? Get in touch with our team of property experts today to discover how it can benefit overseas buyers.
