Overseas buyers purchasing UK property

April 25, 2024

The UK property market continues to be a haven for overseas buyers as long-term stability and the current weakness of the pound make it a particularly enticing investment.

The number of foreign buyers purchasing UK property has been on the rise. A recent report from Benham and Reeves revealed the number of overseas buyers entering the sector across England and Wales has increased by 3.2% over the past year.

Currently, there are 280,021 homes registered to foreign property owners. Individual homeowners account for 67% of these properties, while 33% are owned by overseas companies.

Director of Benham and Reeves, Marc von Grundherr, commented: “With pandemic induced travel restrictions now a distant memory, foreign homebuyers are once again setting their sights on the property market across England and Wales and we’ve seen a consistent increase in demand over the last year.

“We expect the level of foreign interest to continue to climb over the coming year as currently, many overseas buyers are dipping a toe within the rental market to try before they buy, committing to a purchase once they have found the right neighbourhood to suit their individual needs.”

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Where are overseas buyers investing?

Benham and Reeves submitted a Freedom of Information request to the Land Registry to find out the number of properties with titles registered to an overseas correspondence address across each area of England and Wales. This data was also combined with government figures on properties registered with an overseas company.

In some areas of the property market, there have been increases as high as 18.8% in the number of overseas buyers entering the sector. But on a regional level, the North West has seen the largest rise with 5.4%, and the West Midlands follows close behind with a 4.9% increase.

The Capital recorded 4.0% growth in the number of overseas buyers. Greater London is still home to the most properties owned by overseas owners and companies with 103,425 properties. This equates to 36.9% of all foreign owned properties across England and Wales.

Marc von Grundherr said: “London has traditionally been their destination of choice and the capital still ranks top of the table in terms of the sheer volume of foreign homeowners within the market.

“However, we are also seeing a strong uplift in market activity up and down the nation and there are comparatively very few areas where the level of foreign homeownership has dropped on an annual basis.”

High-growth areas like the North West and Midlands have seen strong house price increases, and this is predicted to continue. While London will always be a popular investment location for overseas buyers, the performance of areas such as the North West and Midlands are attracting an increasing number of investors from abroad.

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Why are more overseas buyers investing in UK property?

Overseas investors currently interested in buying UK property are saving huge sums due to exchange rate fluctuations and a weakening pound. The comparatively weaker value of the sterling makes property much better value for those buying from abroad, particularly from certain locations.

This is providing discounts of up to £40,000 despite the increase in property values over the past year, according to additional research by Benham and Reeves. Overseas buyers from the USA, UAE and Hong Kong have been benefiting the most from favourable exchange rates.

While the pound may remain low against certain currencies in the short term, there could be a further influx of overseas interest in UK property as buyers try to cash in now in order to secure the biggest discounts.

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What makes the UK property market so appealing?

The UK property market has proven to be extremely stable and resilient, despite economic and political uncertainties in recent years. As a medium and long-term investment, UK property remains one of the most reliable ways to invest, and many overseas investors are attracted to the sector’s long-term appeal.

In recent years, there has been strong house price growth with prices having increased by an average of 20.4% across the past three years, despite the uncertainties caused by Brexit, the pandemic and increasing inflation rates.

Meanwhile, for those who opt to rent out their investments, the private rented sector in the UK continues to grow as demand for rental properties has increased by a whopping 57% in the past five years.

With such an imbalance in supply and demand, this means investors can benefit from strong tenant demand and yields, particularly in certain hotspots. There are many areas across the UK that are expected to see significant growth in terms of capital appreciation and rental demand over the coming years.

At The Prestbury Advisory, our team of experienced investment consultants can guide you through the process of investing in UK property from overseas. To find out more, call us on 01625 725 779, or email us at contact@theprestburyadvisory.com.

Overseas buyers purchasing UK property

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