Investors from the US are increasingly securing properties in the UK and have even become one of the most prominent overseas buyers across the nation.
For many years, overseas buyers from the US have favoured the UK property market. Many find the property investment landscape in the UK to be particularly lucrative. This has been heightened by the favourable dollar-to-pound exchange rate, which is providing significant discounts and allowing overseas buyers to maximise their budgets.
Recent research by Benham and Reeves looked at the number of homes owned by individual buyers from the 50 most represented foreign nationals in England and Wales. Overseas buyers and investors from the US own the third largest proportion of properties with 6.39%, equating to 11,958 overseas owners, as of January 2023, coming behind Hong Kong and Singapore.
In the past year, there has been a 4.4% increase in the number of owners from the US. These figures come as the total number of properties owned by buyers from the top 50 foreign nations increased by 3.8% during January 2022 and January 2023.
The appeal of UK property investment
The UK property market ticks a lot of boxes. For starters, there are strong capital growth prospects as the sector has shown strength and resilience even throughout recent economic uncertainty.
While traditionally, US investors and buyers have looked at London as a default starting point. Other areas of the UK have begun to increase in demand for overseas buyers as a whole. Cities in the north and Midlands, like Manchester, Liverpool and Birmingham, are continuing to attract more interest.
Marc von Grundherr, director of Benham and Reeves, commented: “It’s no secret that England & Wales is a hugely attractive market for overseas property buyers, with London being a particularly desirable location.
“The stability of our property market offers reliably a profitable space for investment buyers, and our country, with its rich history and culture, has long held great appeal for people looking to buy outside of their home countries.
“Many experts believed that Brexit would result in there being fewer overseas owners as access to the EU was reduced and the anticipated economic struggles removed some of the profitability of investing in our great nation. Our exclusive research reveals that none of this has come to fruition and that, in fact, our market has only become more popular.”
US vs UK rental demand
For those who opt to rent out their property investments in the UK, the private rented sector features high tenant demand and strong yields, especially in certain hotspots across the country. Currently, property investors in the UK keep seeing boosts in tenant demand and rent increases.
A survey of nearly 700 landlords by Paragon Bank found that 67% experienced increased demand in the first quarter of 2023, which is an all-time high. In response to increasing demand, rents have also risen. The survey revealed that 85% of landlords said rents were currently increasing in the areas where they let property. This shows the strength the private rented sector is seeing.
On the other hand, the rental sector within the US housing market is seeing a different story. The median asking rent in the US fell by 0.2% in April, according to figures from Redfin. This is particularly notable as rents typically rise at this time of year. And at the same time, landlords are facing rising vacancies.
So, the UK property market is proving to be a particularly lucrative property investment landscape as the sector has remained robust through economic ups and downs. And with such good long-term prospects, US property investors continue to have confidence in UK property right now.
BuyAssociation has been helping overseas buyers, including US investors, access the UK property market for 18 years. Get in touch with our team today to learn about our current investment opportunities and find out more information on how we can help you invest.