Investing in the UK
Best Strategies for Changing Times
LISA BATHURST
Lisa Bathurst is the founder of Hurst & Wills, a boutique international real estate advisory based in Cape Town
H
urst & Wills hosted a series of educational events across South Africa this March to address the growing popularity of the UK property market, the current window of opportunity that has opened up with the devalued pound, and the development of new strategies for UK property investment.
Of those who invest offshore, 38 % of South Africans choose to do so in the UK. This is not surprising, considering that returns from the UKs residential market have outperformed gilts, equities and commercial property for the last 30 years. South Africans have strong affiliations with the UK, and the legislative system is fairly straightforward, with a stable economy and trusty governance, so it’ s easy to see why the country is a popular investment choice.
Whilst the UK has always been a hit with the South Africans, it is important that both investors starting now and those who have invested over the years and continue to do so recognise that the market has evolved.
Changing times
Traditionally, those investing in the UK did so through residential Buy To Let investments, with many investing in high yielding Houses of Multiple Occupancy. However, with changing tax laws and newer generations’ changing attitudes, these strategies are becoming less effective.
Now, there’ s a new kid on the block. This new sector, called Build To Rent addresses the housing shortage in the UK. With the country currently suffering under-supply, the government has confirmed the need for up to 270,000 new homes a year to satisfy demand. In recent years, savvy developers have set about plugging the gap.
Understanding the changing attitudes of UK renters is crucial to any investor. Most young professionals in the UK now rent instead of buying, and by 2025, it is expected that 60 % of 25-39 year olds will do so. This market seeks modern developments close to their
50 APRIL / MAY 2018 SA Real Estate Investor Magazine