UK INVESTMENT
Good Reasons
12to Invest into the UK
Cash flow properties abound
BY DREW HOOK
The United Kingdom ( UK ) has always been the first market South Africans have turned to with great success . Here are twelve reasons why we think the UK is a great investment destination :
1 Economy
The United Kingdom is the 5th largest economy and one of the most stable in the world . The economy is dominated by the service sector and then followed by aerospace , pharmaceutical , automotive , oil and gas sectors
2 Currency
The Pound Sterling is the 3rd largest reserve currency after the US Dollar and Euro and is regarded as one of the strongest currencies in the world . London is the world ’ s capital for foreign exchange trading
3Affordability of housing House prices across England on average are 6 to 7 times the average annual salary . For targeted investment areas , the house price to annual income ratio varies between 3 to 5 times .
4Interest rates The Bank of England controls the interest rates , which are in the lower 15th percentile when compared globally . Interest rates indicate the cost of borrowing related to a property investment .
5 Funding ability
The funding market can be described as investor friendly , where investor and development finance is readily available . Non-resident finance is limited .
However lending rates and terms are more preferential for resident investors .
6 Employment
United Kingdom unemployment levels vary between 6 to 7 percent of the working population . This is on par with other developed economies such as United States of America and Australia . This creates a unique social housing opportunity for landlords given the housing benefit scheme in the United Kingdom .
7Housing demand The United Kingdom Parliament forecasts a shortfall of 250,000 properties per annum , which will ultimately increase property prices within the United Kingdom over the next 10 years .
8Rental demand 36 % of the housing market is tenant occupied . Over the past 10 years , 90 % of the new available housing stock built in the market has been tenant occupied . Rental demand is driven from both professional and social housing tenants .
9Rental yields Rental yields vary from 3 % to 20 % across the United Kingdom and are dependent on the investment strategy , area and type of property . Experienced property professionals can expect a rental yield between 10 to 20 percent per annum .
10 Cash flow
The differential between high rental yields and the low of cost of borrowing creates an exceptional and unique opportunity to generate positive
44 DEC / JAN 2017 SA Real Estate Investor www . reimag . co . za