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