GCC Property Investors Choose UK Housing Market
The UK is the number one global destination for Gulf Cooperation Council property investment, according to a recent report by Al Rayan Bank.
Despite market headwinds, a third of investors from Saudi Arabia, UAE and Qatar have invested in UK buy-to-let properties over the last year, more than any other property market.
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How Are Foreign Investors from the GCC Spending Money in the UK Housing Market?
The study showed that GCC investors spent more in London last year ($90.8m) than in any other major city globally, with Tokyo and Zurich just behind.
95% of respondents said they had invested in the UK housing market over the last year, spending an average of $81.9m.
Nine of ten GCC investors saw the UK as a strong buy-to-let investment opportunity. 85% of respondents stated they felt growing confidence in the market thanks to surplus demand, record-breaking rental growth, strong investment returns and a diverse array of assets.
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What Do the Experts Say About GCC Investment in the UK Property Market?
Maisam Fazal, Chief Commercial Officer at Al Rayan Bank, had the following to say:
‘UK property is the darling of GCC investor portfolios […] and despite a challenging period for the market, investors know they can rely on the UK’s stable currency, growing demand for housing, rising rental incomes, transparent legal system and its established network of skilled property professionals, which make buying and owning property in the UK a profitable and headache-free experience.
‘This is an auspicious time for those with assets to deploy in the UK property market, and coupled with those from the GCC considering Britain as a second home, I’d expect this trend to continue.’
The founder of the MCR Property Group, Aneel Mussarat, said:
‘There is undoubtedly a bias towards the UK among GCC investors because of the long-standing relationships that exist with developers and agents across the market, the absence of any language barriers and the surplus demand and strong rental growth that we continue to see.
‘London remains the primary focus, but investors are increasingly willing to look further afield. The regeneration that continues apace across the UK’s regions is creating more attractive investment opportunities for GCC investors, and we’re seeing this reflected in our own portfolio.’
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Where Do Foreign Investors Target for UK Property Investment?
The Al Rayan Bank survey showed that 93% of respondents planned to make new investments across the UK in the next five years.
According to the research, the most popular cities for foreign investment in the UK are:
- London (56%)
- Liverpool (34%)
- Manchester (34%)
- Birmingham (26%)
- Brighton (23%)
- Newcastle (19%)
Interestingly, two cities in the North West are the most popular investment opportunities outside of London.
The North West is an attractive proposition for many buy-to-let investors, thanks to good-value property prices and competitive rental yields. Liverpool, for example, has an average property price of £180,268 and rental yields that exceed 7% in certain postcodes. In comparison, London has an average property price of £527,979, according to the HM Land Registry UK House Price Index.
Regarding the type of property people wanted to invest in, 59% of respondents considered residential apartments, while 49% were looking for residential housing.
Sustainability has also become a key consideration for foreign investors in the UK. 58% of surveyed investors said that green investments make cities in the UK a lucrative investment opportunity.
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