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Foreign Investment in UK Property: Industry Trends for 2024

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Foreign investment in UK property is driven by various benefits, including the UK’s stable economy, robust legal framework, and the enduring appeal of British real estate. As a foreign buyer, you’re looking to capitalise on the potential growth and security that UK property has to offer, and the best way to do that is to keep an eye on trends.

Getting in on trends early can give you a big advantage when investing in property in the UK, as you can buy at a lower price before demand and prices increase in up-and-coming locations and schemes. So, keeping an eye on what’s coming up can really pay off, which is why we’ve put together some of our predictions for market trends in 2024.

UK Property Market Trends for 2024

In 2024, we expect several key trends to shape the industry:

Adjustment in Property Prices 

Currently, the property market in the UK is experiencing a period of adjustment, mainly in response to factors like inflation and interest rate increases. Nationwide data indicates that UK house prices have seen a slight decline, which is the first annual drop since 2012.  However, even though there is an overall decline, certain areas are having positive growth, such as Middlesbrough

According to the Zoopla House Price Index, buyer demand has increased recently due to improved consumer confidence and market sentiment, and inquiries to estate agents have risen by 12% since the August Bank Holiday weekend. The gradual decrease in mortgage rates is expected to improve market liquidity and support sales volumes, with 2024 appearing more likely for this to happen.

In 2024, inflation is expected to come down, and interest rates will likely hover at the current rates for some time to combat and help encourage less spending in the market. Whilst interest rates remain high, property prices will be seeing similar trends to 2023, and buyers will be looking to areas that are less affected by the upward and downward trends historically to purchase higher-yielding investments that can outpace inflation and provide a return on investment.

Rise in Social Housing Investments

One emerging trend in the property investment industry is the search for high returns with lower financial barriers. Social housing fits this trend perfectly, offering properties starting at £80,000 with returns between 8-10%. 

Ethical or impact investing is becoming more mainstream because social housing investments allow investors to contribute positively to society by providing affordable housing and aligning financial goals with social responsibility. These investment opportunities can stimulate economic growth, create job opportunities, and have a positive impact on the communities in which you invest.

Social housing is often managed by housing associations or local councils, making it ideal for investors looking for hands-free investments. Yield Investing offers free property management on your property investments with us, which allows investors, especially those based overseas, to benefit from a hands-off investment model. 

As investors increasingly seek to diversify their portfolios with alternative property types, social housing offers this diversification, hedging against market fluctuations in the traditional property sector.

Investing in Northern Properties

Location is a key variable in property investment, serving different purposes depending on the investor’s strategy. High-yield areas are particularly attractive, offering returns that outpace inflation, thereby providing a robust rental income. The North East of England offers some of the highest yields in property investment, coupled with relatively low entry levels for investors.

The North East is not just a high-yield region but also a diverse landscape for property investment. Cities like Newcastle upon Tyne are emerging as cultural and economic hubs, with thriving sectors like finance, healthcare, and digital technology. These cities are experiencing a steady influx of professionals, ensuring a healthy demand for rental properties.

The region is also witnessing significant regeneration projects. For instance, Middlesbrough’s Middlehaven project has transformed former industrial lands into modern residential and commercial areas. These initiatives revitalise the town centres, making them more appealing for living and working. This, in turn, drives property values upwards, offering investors the opportunity to capitalise on this appreciation.

Government Policies & Global Economy

By staying updated on government policies and the wider global economy, you can identify new areas of gentrification and investment opportunities to find the next UK hotspot. This could be places where the government is planning to invest or areas that are starting to grow because of global trends. Investing in these “hotspots” early can give you a better return on your investment.

In 2024, UK property market trends are expected to continue being influenced by various regulations, including Capital Gains Tax and Rental Income Tax. These laws are designed to maintain market stability but are crucial for foreign investors to understand for smart investing. At Yield Investing, we specialise in navigating these regulatory trends, offering expert advice tailored to your individual goals and circumstances. For a detailed guide on how these evolving regulations could impact foreign investments in the UK property market, refer to our non-residents guide.

Global economic trends and events, like rising interest rates or economic growth in another country, can also affect the UK property market. For example, if the U.S. economy is strong, Americans might invest more in UK property, driving up demand and prices.

Are there restrictions on foreign property ownership in the UK? 

As a foreign investor, you can buy property in the UK. Yield Investing specialises in helping foreign investors discover high-yielding UK property investments that align with their financial aspirations.

How can I invest in UK property as a foreign investor?

If you’re ready to explore the opportunities in the UK property market or have specific questions about foreign investment, please don’t hesitate to contact us today. Enquire, and let’s start your journey towards successful property investment in the United Kingdom. At Yield Investing, we’re your trusted partners in property investment, and we look forward to helping you make the most of this exciting opportunity in 2024.

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