Global businesses are investing in the UK

The UK’s property market is stronger than it seems. It is growing and attracting international interest despite global political and economic challenges. The UK is seen as a safe haven, and international investors are buying property on a large scale.

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Why are international businesses buying property in the UK?

The main types of businesses buying UK property in bulk for investment purposes are banks and hedge funds. There are a range of reasons for this:

• There is an overwhelming demand for homes in the UK
• Construction rates are low
• Consequently, property is seen as a safer bet than other investment types
• A mix of immediate and long-term returns
• Historic growth trends point consistently upwards

That provides the right mix of return on investment now and reliable returns in the future. It also makes property the right kind of investment to serve as the foundation of a much larger fund.

A second reason is changes in policy abroad. The most impactful is the US government banning institutional corporate investors from buying single-family homes in their own country. Those funds may be based in the USA, but they operate internationally – leading them to search for an alternative market in which to continue building their property portfolios.

Blackstone, a New York-based asset manager, is one notable example of a hedge fund which has tied up major assets in property. The firm has more than $320bn (£240bn) under management.

Another example is Lloyds Bank, which has amassed a portfolio of 7,000 homes in recent years. The bank aims to build that up to 50,000 homes by 2030.

A spokesperson for the bank said: “We are pleased with the significant progress made to grow the Lloyds Living business since its launch in 2021. [It] is already contributing significantly to the group’s diversified income streams.”

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Is this good news for buy-to-let investors?

There is a big difference between institutional investors and people building personal portfolios. However, in theory, this should be good news for buy-to-let investors who either have an existing portfolio or are considering buying more UK investment property for sale.

It is likely that the increased attention from global businesses in the coming years will increase demand. The more money there is in the sector, the higher prices will go. While that is not good news for people trying to buy a home to live in, investors are likely to profit.

Those increased prices will also serve to keep more people in the rental sector for longer. That will create more demand for rental property and push rents up. Once again, investors will benefit even if renters don’t.

It is also worth considering the wider effects of having enormous global hedge funds and banks involved more deeply in the UK market. They represent an internationally significant financial force which will have every reason to ensure that the market keeps growing. The more property they buy, the more invested they will be to ensure that returns keep growing.

This is not something most investors can have any input over, but they are likely to see benefits as the fundamentals of the housing market as a whole are reinforced by people and institutions with significant influence over the market and the political economy.

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Get ahead of the market and buy off-plan property now

The best way to ensure that you benefit from the wave of global businesses investing in UK property is to secure your next investment now. If you buy off-plan property, you can benefit twice over.

First, when you buy the property at today’s price before the market expands. Second, when you come to pay for the property in the future. As the economy and global political situation improve, mortgage rates will decrease, and you can benefit from cheaper borrowing prices.

This is the right time to invest in UK property and make the most of the increasing competition in the market from global businesses. Contact our team today to find your perfect UK property opportunity.