UK property increasingly attractive to overseas buyers

New figures show that the vote for Brexit, and subsequent fall in the value of the pound, has prompted more international investors to invest in UK property.

A new report published by Lambert Smith Hampton reveals that in the third quarter of 2016 the level of investment in UK property from commercial overseas buyers was at the highest it has been all year.

The third quarter saw international investors buy £4.9 billion worth of UK commercial property. The strongest level of investment in 2016 to date. The report notes that “the sharp fall in sterling” has “undoubtedly attracted opportunistic overseas interest”. It also details that “Far Eastern investors were the largest net-buyers of UK property, amounting to £1.3 billion in the third quarter.”

Overall, investment levels in the commercial sector were modest throughout the quarter, as the market continues to come to terms with what Brexit result will actually mean.

The report outlines that commercial investment levels in the north-east and north-west saw “the greatest volume of activity against trend – 12 per cent and 7 per cent above the five-year quarterly average respectively”. It also mentions that the single largest asset deal outside of London came in Manchester at £164 million.

“While third quarter volumes slipped to their lowest level in three years, the referendum result arguably attracted overseas investment rather than deterred it, helped by the weaker pound and a sell-off of quality assets from the retail funds,” commented Adam Ramshaw, Head of the East Midlands Region at Lambert Smith Hampton. “The continued inflow of overseas capital also underlines that the investment fundamentals in UK property remain on a sound footing.”

He added: “Even if growth prospects have dampened post-Referendum, UK property continues to look relatively attractive against alternative assets such as bonds, and there is little to suggest the position will materially change in the foreseeable future.”

Article published 18th November 2016