UK Property A Global Hotspot For Investors
We’ve had a busy week at Bold Spirit taking enquiries from as far afield as Australia, India and the Middle East to a bit closer to home, about 300m from our central Liverpool offices. All of the enquirers are seeking income (with security) from property investment in the UK.
The key to the security requirement is the ‘UK.’ We have seen over the past few years a series of crises around the globe, emanating from the credit crunch and collapse of Lehman Brothers in 2008. The crisis within the financial sector led to a full blown sovereign debt crisis, with Greece just the tip of the iceberg and that country as well as other EU states will no doubt continue to make the headlines in the coming months and possibly years ahead.
I think the UK is viewed as a safe haven for property investors primarily due to:
• A stable, democratic political system
• An independent, sovereign currency and the ability to control its own monetary policy
• Property ownership has the backing of a robust, well tested legal system
• Tenants, who fail to pay, can be evicted relatively quickly, unlike in many other countries
• A continuing imbalance between the demand for property and its supply
Indeed, this supply/demand imbalance was also highlighted yesterday in The Daily Telegraph newspaper. David Miles, one of the Bank of England’s nine rate-setters, said in an official paper that the desire for space caused by the UK’s rising population would reinforce planning restrictions and make it more difficult for house builders to keep up with demand. As a result, he said: “We should anticipate a rising trajectory for real house prices over the longer term. This is particularly likely in a country like the UK where population density looks set to rise relatively fast. The model also suggests that the upwards trajectory in house values may ultimately become steeper than the rise in real incomes.”
Mr Miles is not really telling us anything we don’t already know. A growing population, changing demographics and a restricted supply of property underpins capital values and rental returns. Cash investors have been drawn to the relative returns from UK property.
Today, we have submitted a bid to a receiver on behalf of a client for a well tenanted development with strong leases, yielding 11%. In a good location and condition, the return – compared to other options such as cash, gilts or the stock market – and the relative ‘security’ of this investment, puts it in the ‘blue chip’ category. The quality of property investments available through receivers, administrators and sometimes auctions, combined with the stability of the UK, despite widespread economic turmoil, is attracting large amounts of overseas capital which is the envy of other countries.
Bold Spirit presently has available the following stock:
• 6 apartments in a city centre location with a total guide price of £300,000. Fully tenanted at over 9% yield.
• 7 new build houses with a guide price of £500,000 and a yield of 9%.
• Portfolio of houses with a guide price of £1 million and a yield of 13%.
• 3 prestigious developments ranging from £500,000 to £2 million with yields in excess of 9%.
• Commercial development in Manchester yielding 12% with a guide price of £500,000
Please note that we are only able to send details to registered clients with proof of funds. If you would like to register as a client, please click here
I am conscious that we have a lot of investors who are looking to buy individual properties, not just whole developments, and we will shortly have a stock of strong yielding, tenanted apartments for sale. Further details will follow shortly.
Finally, for those of us who live in the UK, it’s Budget Day tomorrow, when the Chancellor of the Exchequer (Finance Minister) sets out the government’s budget. As ever, we all wait with bated breath!