Residential funding and investment: the influence of overseas players
For years, London and the wider UK market has provided a popular property destination for foreign investors and developers looking for their next opportunities. London continues to hold global sway as an international business capital, as well as being largely diverse in terms of its population. As global investors continue to flock to the capital, we examine the activity of some of the key players in UK foreign investment right now.
Despite changes in the UK economy and political situation, China remains as active as ever in the UK market. Recently, Chinese investors have flocked to major UK cities, like Manchester and Liverpool, with total enquiries soaring to 255% and 160% higher than January 2017 respectively. Whilst London has seen a dip of around 48.5% in Chinese investment enquiries, the UK capital remains the most popular destination for Asian investors, particularly amongst developers with bigger budgets. Furthermore, the leading residential property developer in China, Country Garden, has just recently announced a £400m investment to provide 785 new homes in the Poplar area of East London, interestingly with plans to build almost a quarter of these as affordable homes.
The influence of Brexit
The influence that Brexit has had on overseas activity in the UK market so far is undeniable. Whilst it is on its way to recovery, the devaluation of the pound following the Leave vote provided overseas with added impetus to invest in the market, with £5.43bn in funds raised solely by Asian investors in just one year and house prices in London falling for the first time since the recession in 2009.
With the visa and trade systems set to get less complicated for Asian nationals post-Brexit, it’s no surprise that interest from these investors is still sitting at healthy levels. The necessity of renegotiating trade deals is also likely to strengthen ties with the US and Canada, and an upswing in investment from these less active players could make a difference in the market.
Also undeterred by the effects of Brexit on the UK property market are Norway who, in a surprising move, invested more of the Norway wealth fund into London property last year than New York, previously the biggest investment from the fund.
Notwithstanding the troubles UK residents are facing within the housing market at the moment, it seems that the lull in demand is a surging opportunity for overseas investors. It will be interesting to see how much this may be impacted going forward, with the introduction of Unexplained Wealth Orders (UWOs) to combat instances of properties being acquired through corrupt means, and whether this may see a slight revival in pricing and availability for UK buyers.
Find out more about the influence of overseas investors at an LD Event. With analysis and key insights from expert industry players across all sectors, our conferences are must-attend events for property professionals looking to get ahead of the game, with attendees travelling from all over the world. Book your place at the next Alternative Residential Property conference, or have a look at our other upcoming events.