Why it is wise to invest in UK real estate

According to the latest statistics, the United Kingdom houses the most liquid, prestigious and expensive real estate objects in the world. Also, the country itself is distinguished by an excellent level of education, modern, dynamically developing infrastructure and totally impressive shopping and entertainment facilities, cultural sites and attractions. The country attracts foreign capital and serves as a master place for outflow of money from all the corners of the globe: from Eastern Europe and Persian Gulf to South-Eastern. The financial heaven for large international businesses and favourable climate for virtually any business development – the shortage of options on real estate market is not accidental. So, what else you should know about the UK property opportunities?

The UK finds itself in a stable economic situation and well-established work of state institutions, loyal legal and tax system for foreign investors, who can consider the following real estate opportunities:

  • Favorable dynamics of economic indicators;
  • The competitiveness of the state;
  • Stable and established activities of the state apparatus;
  • No need to pay income taxes on the sale of real estate for individuals of non-resident status;
  • Loyal taxation system for investors from abroad.
  • Thorough protection of the right of possession

According to the ratings of The Heritage Foundation and Wall Street Journal and The 2015 Index of Economic Freedom, the United Kingdom became one of 15 countries with economic freedom, boasting the following aspects:

  • It implements the principle of freedom and protection of trade, investment deposits, the business environment on all the levels;
  • Low levels of corruption;
  • Implemented protection and the protection of property of a person;
  • There are effective state institutions;
  • Well-established loyal legislation attitude to lessors of real estate;
  • Well-balanced labor laws.
  • High investment potential and minimum risks

Given the mentioned above fact, the unprecedentedly high costs of real estate are not surprising, especially in London. According to the reports of conveyance solicitors and real estate agencies, the average price in prestigious locations, such as Chelsea, balances in the range of £1.2 – £1.4ml. Moreover, it is projected that the rise in prices will have a long term effect, at least in the next 5 years in the event of the absence of regulations. The trend is due to a chronic shortage of supply, the insufficient number of construction options. Government statistics indicate that for each year the shortage is growing by 100,000 thousand units so meeting the demand is the mission impossible, and the state of affairs naturally provokes a significant increase in rental price.

Nowadays, liquid real estate assets can be acquired throughout virtually the entire country, so investment in real estate acquisition is associated with minimal risk in general. The objects of residential properties are high-quality assets that guarantee the diversification of investments, as price fluctuations in the housing does not involve price fluctuations of shares, commercial real estate, or bonds of the state.


The prospects for construction and change of the situation in the London property market

The shortage phenomenon has a downside – many investors from abroad, without studying the market offers, fear of lack of facilities. In fact, the United Kingdom residential capital fund is ready to offer the facilities on the open market, and that to separate on the price class, and class, and geographical location – so each buyer will be able to make the investment.

The fact that real estate in London is available to purchase, indicates a recent report of Savills Company, which reveals that the price category where the cost of the square meter is exceeding £18,000 per square is significantly growing. To date, the elite real estate in the capital is sold at a price of around £60,000 per square meter, at the same time the selection of mid class housing is always there.

In addition, the municipality wants to attract investors into the market, so the real estate development in London primarily focuses on housing. To eliminate the housing deficit, attracting investors and recruitment of primary residential real estate market, the municipality has created a Building Committee, which is tasked with the complete elimination of the deficit by 2020.

In 2014, a multiplicity of construction projects has started on large areas of land. In the West, it is an area Old Oak Common, the construction of which is able to cover the demand of 2.4%. And also the site of The Docklands (East London). At the same time the construction of the primary real estate in London in these regions, as analysts predict, will lead the overall development of the infrastructure, which will affect the value of the objects. Thus, investors will get not only new proposals, but also a marketable commodity that has a high potential yield.

Speaking about the prospects of construction in the elite areas, the historical center, the most promising is the construction of luxury housing estate in Kensington. The starting price of one-bedroom apartments in the complex starts from £1,500,000, plus the legal expenses – the services of conveyance solicitors, but in the next 5-7 years the cost may double. A similar situation was characteristic of the new housing estate in Battersea, the construction of which ended in 2013. By the end of the construction of the area the price has increased by 13% on average. The not numerous construction areas in Chelsea and Mayfair have all the chances to go even beyond the two-fold increase – the elite property niche experiences a significant surge and the trend seems to be having a progressive nature.

All this testifies to the fact that the investment in the primary residential segment is also possible, and it also looks promising. Moreover, the purchase of primary residence is economically more accessible than the purchase of real estate with the aftermarket. To increase availability of real estate developers offering to pay money for the object partially, than making a deposit.