Far East investors looking towards UK real estate
To those who watch the worldwide property markets there will be little surprise to learn that increased demand for UK property is emerging from the Far East. Indeed a number of reports have confirmed that investors from Hong Kong and Singapore are seemingly growing more interested in UK property for a number of reasons. Even though the UK property market has been one of the best performers over recent years there is still potential upside in the short, medium and longer term.
Strong markets breed confidence
The demand for UK real estate has benefited greatly from recent strength across the UK property market and confidence in the UK economy. This may seem a little surprising when you bear in mind we are approaching the closest general election in living history but compared to the likes of Europe, the US and other parts of the world, the UK is still in great demand and attracting a growing confidence.
Safe haven status
Historically the UK has attracted more than its fair share of safe haven investors, predominantly investing in London property, and this has certainly continued over recent times. The UK government’s decision not to take on the Euro and remain a relative outsider to those taking on what was a new currency has certainly paid dividends. The ongoing debacles in Greece, Spain, Portugal and other areas of the European Union have decimated the Euro and some experts believe it could take years to recover. Amid this concern it is not difficult to see why UK real estate has become something of an even stronger safe haven.
Slowing Far Eastern economies
We have seen the likes of Japan, China, Hong Kong and now Singapore reporting subdued economic growth and reduced demand for property. As we touched on above, this has prompted investors from Hong Kong and Singapore in particular to switch their investment focus to the UK where they see better value. While the local press has in some quarters been critical of the UK economy in recent times, there is no doubt it has performed admirably compared to the vast majority of the developed world.
US base rates set to rise
While there is some confusion as to when UK base rate will increase it does look as though the US Federal Reserve will be the first to increase domestic base rates. As a consequence there has been a reduction in demand for US property amid concerns that higher rates in the short term will subdue property markets and make finance more expensive. We could see a similar situation with UK base rates although many experts believe the UK economy is stronger than its US counterpart and the property market offers better value.
Conclusion
When the UK authorities refused to take on the Euro they were criticised by each and every member of the European Union. However, only a few years later the UK government has benefited greatly from retaining the pound and the UK property market has become something of a safe haven for many overseas investors.