With offices getting busier, landlords are doubling down on urban flats, and UK regional cities are proving to be exciting investment opportunities for overseas investors.
The latest data from Shawbrook Bank revealed there’s an upwards trend in office working, which could provide opportunities for overseas investors. A total of 43% of workers are now returning to the office. As a result, many landlords are identifying investment opportunities of properties in UK cities, particularly flats.
In the survey, 28% of landlords in the UK agree that flats in cities have been the best investment over the last year. And 26% believe they’ll continue to be so over the next 12 months. Other notable investment opportunities include semi-detached properties in cities and student accommodation.
Emma Cox, managing director of real estate at Shawbrook Bank, says: “The end of ‘the flight to the countryside’ and resurgence of city living post-pandemic has not gone over landlords’ heads as investment in urban properties has gained strong momentum.
“Whilst the property market still remains turbulent, with high-interest rates and inflation impacting buyers, landlords are adapting their strategies to diversify and stay on par with changing trends.
“Now may also be the right time for professional landlords to partner with a specialist lender, to maximise opportunities available and future-proof businesses against any further market challenges.”
New builds in regional locations
Demand for new-build homes is forecast to build throughout 2024. Despite anticipating a continuation of the challenging market conditions of the past year, Knight Frank has said that demand for new homes remains robust, particularly in certain regional locations.
Mark Evans, partner at Knight Frank and head of regional residential development, comments: “Overseas investment markets are increasingly exploring regional opportunities, especially in cities with renowned educational institutions.
“Second homeowners are gravitating towards areas housing these educational hubs, presenting an investment opportunity.”
Property investors are also increasingly looking for turnkey solutions, according to Knight Frank. And energy-efficient properties are becoming even more appealing in the sector too, making new builds a great investment option.
Optimism in UK property
While 2023 was a year involving a lot of uncertainty, property investors are finding 2024 to be more positive. UK inflation has fallen rapidly from its high point last year, and interest rates have been frozen for some time now.
Domestic and overseas investors remain highly active in the UK housing market, and many have become more optimistic in recent months.
There are variations depending on where investors are operating. Rental markets in high-yielding areas where property prices remain lower than the national average often fare better than more expensive locations where mortgage rates might cause more issues.
Future prospects for overseas investors
As the population in the UK is forecast to continue to increase, the need for more housing is set to grow. And investors will likely feel the effects of this in the form of higher demand for their properties.
A million more households could even be renting in the UK by 2031, according to Savills. Using these figures, an estimated £300bn of investment is needed in the rental market in order to keep up with demand.
With the ongoing gap between supply and demand, soaring tenant demand is one of the top reasons to invest in UK property, and investors looking for the best investment prospects tend to target busy cities or towns. This is as modern tenants are often looking to live close to amenities, conveniences and transport links.
The strength of the UK property market means overseas investors, including US buyers, are keen on snap up property. With exciting long-term prospects, more overseas investors will likely continue investing in UK property.
BuyAssociation has a range of property investment opportunities available in the UK for overseas investors, whether you’re looking for a city centre location, a property in a high-yielding commuter belt, or something different. Get in touch for more information.
