There has been a sharp rise in the number of opportunistic foreign investors taking advantage of effective discounts caused by the fall in the value of the UK pound in recent months by acquiring property in Britain.
A weaker exchange rate means that UK property is now a lot cheaper for foreign buyers.
Historically, many overseas buyers have targeted London’s prime areas, but fresh research from The Mistoria Group shows that more international property investors are now looking at cheaper areas across the country that offer better value for money homes and higher rental yields.
The study found that foreign buyers are particularly keen on investing in the buy-to-let market in the North West of England where double digit rental returns are achievable.
The findings show that there has been surge in foreign investors acquiring student property in Liverpool and Salford, up by 42% year on year. The vast majority of investors are from China and Hong Kong followed by UAE, Russia and Singapore.
Chinese buyers are especially keen on apartments and HMOs in northern cities, many of which have high rental yields. The government’s ambition to create a Northern Powerhouse is also helping to drive foreign investment in the North West.
Mish Liyanage, managing director of The Mistoria Group, said: “The Brexit vote reduction in the value of Sterling against the dollar and the yuan, has boosted Chinese investment in the likes of Salford and Liverpool.
“The Chinese are not alone in their enthusiasm for newly-affordable UK bricks and mortar. The Brexit effect means that British property is 20% cheaper for many foreign investors and there are no signs that this is likely to be reversed in the near future.”
According to deVere Mortgages, part of deVere United Kingdom and deVere Group, mortgage enquiries from overseas buyers and British expats rose 45% in the fourth quarter, compared to the previous quarter.
Mitch Hopkinson, head of advice at deVere United Kingdom, commented: “deVere Mortgages has received an unprecedented level of enquiries this last quarter. There has been a remarkable uptick in home loan enquiries in quarter four.”
He added: “With sterling down sharply since the Brexit vote, UK property has effectively put a ‘for sale’ sign up for the many overseas investors who want to establish a presence in the UK. These might include investors simply wishing to diversify their property portfolio, or UK expats looking to buy a place to return to when they retire or to house a child while they are at university.”