US Investors Seeking Alternative Regions to Invest in UK Real Estate

US Investors Aim to Buy UK Properties.

The excessively high prices of Central London properties have forced US investors to seek options elsewhere in the UK, while central London properties remain the favourite destination for Asian buyers.  

The data by Real Capital Analytics suggests the value of the investment by US property buyers in the UK in 2018 first half was up to $3.1 billion, whereas, in 2015 – the investment was over $16 billion. 

The US investors are seeking other regions – for industrial investment as properties in London have gained beyond previous peaks, although Asian buyers are still investing – E.g. Korean investors bought the London headquarters of Goldman Sachs in 2018. 

The EU real estate buyer Baring bought new properties in Manchester. The company is also looking for opportunities in Leeds and Liverpool, which is looking for at least 1,000 units. In addition, LCN Capital Partners recently bought office space worth $145.7 million in Aberdeen, and Invesco bought a residential buy-to-rent worth £86 million in Liverpool.

US Buyers Invest in the UK

The gains in the dollar made it cheaper for US buyers to invest in London, but the rates at some of the key locations and leading office areas increased more than 50 to 60 per cent compared to their previous peaks, while the properties outside London are still gaining.

The US buyers invested more than $90 billion in UK real estate in the past decade, but most of the transactions, i.e. about two-thirds of the total investments, were made outside London. 

Some niche segments in property investment include self-storage, senior housing, and private rentals, where investors believe the UK offers stable opportunities compared to other parts of Europe.

Foreign Investors in the UK

Many long-term investors claimed Brexit uncertainty in 2018 is not having any decelerating effect on property buying in the UK, as was witnessed at the start of Brexit. Some London properties offer hefty discounts to attract new investors from overseas, while some buyers seek alternative options in Frankfurt, Dublin, Paris, and Amsterdam. 

Some London-based property firms are buying new properties in Dublin and Paris, and banks and financial institutions have already moved out to these cities during the transition.

Since the status of London properties remains ambivalent, the government introduced new regulations to increase the number of real estate registrations. In addition, to promote easy registration of properties during the post- Brexit phase, the UK government announced a fast-track process for EU citizens that will allow decisions to be made in less than six months.

Also, the process of applying for home registrations would be made simpler and shorter.  

The applicant will have to declare their identifications, but they don't need to reside in the country during registration. EU residents will be given an ID number, while they do not require a physical card to use any public services.

Some other provisions include offering settled status for retired, stay–at–home, students and carers, where they will not have to provide income proof. Previously, the office was criticised for delays where it took more than six months to process residency applications in the UK.

To know more about real estate deals in the UK, click Hamilton International Estates.