Real Estate Investor Magazine South Africa Real Estate Investor Magazine - April 2017 | Page 49

have combined with low interest rates to create a
relatively unexciting, reasonably predictable, but
somewhat slow market, with some inevitable hot- and
cold spots.
For many investors, yields remain reasonably good
when compared to interest rates on bank deposits but
those requiring borrowing, who are also higher-rate,
UK taxpayers will start to be hit in April when the
tax relief on mortgage interest will be restricted to the
basic rate. For this reason, some investors are looking
to hold properties in a limited company.
I reflected in September 2016 that “it is of course
far too early to tell what the medium and long-term
impacts of Brexit will be on the market but the
initial worries appear to have been proved totally
unfounded”. What’s interesting is that a lot of the
current commentary on the property market contains
no mention of the word “Brexit”.
What is happening appears instead to be driven by
traditional influences, such as supply and demand,
low interest rates, very low unemployment and the
continuing robustness of the UK economy.
There are also some very major national
infrastructure projects on the cards, which will also
have significant impact. Crossrail in London will
come on line in two years’ time and will speed up
movement within the capital, which will inevitably
have local effects on parts of Greater London and
central London. Additional projects include HS2 (the
high-speed railway planned to run between London
and Birmingham and on into the north), the runway
at Heathrow airport, and the construction of the
major nuclear power station at Hinkley Point.
South African investments
We continue to see significant interest from South
African investors, particularly in respect to readily
lettable units in Western London, but also in much
more affordable areas outside of London, especially in
apartments in purpose-built blocks.
Also, while there has been increased legislation
surrounding the tenancy agreements, it has not been
enough to deter entry (or exit) to the market, which is
fully accessible to overseas investors.
The main complaints I can observe concern the
difficulties for South African investors in obtaining
mortgage finance. There are specialist lenders
around but there is clearly a large gap in the lending
market, which, if filled, would encourage even more
investment by South Africans eager to diversify their
portfolio.
As conveyancing lawyers, we tend to see a snapshot.
For those wanting want to have a wider view of the
statistics, I would recommend visiting sites like
rightmove.co.uk.
RESOURCES
Bartons Solicitors
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