Marketing No Comments

2021 UK Property Market Outlook for Overseas Investors

Generally, the UK is considered to be a very good place for Property Investors seeking buy to let properties, but changes to regulations and the property market can affect whether it is the right time to buy UK property. Covid-19 and Brexit have had a big impact on the UK economy and the property market, so if you are a British Expat or Foreign Investor looking to buy property in the UK, you should find this information useful.

Are UK Property Prices Good Value?

Following the outbreak of Covid-19 the UK property market has experienced a big shift in house prices, with the market bouncing back after the UK’s first lockdown and reaching a record high for house prices. Indeed, UK House Prices grew at their fastest rate since 2015 in November and indeed this trend is expected to continue with a very promising start expected for beginning of 2021.

Of course, high prices are not ideal for property investors, however property experts are predicting prices to reduce over coming months. One significant factor in this will be that the stamp duty holiday introduced by the UK government will expire in March 2021.

When compared to other countries, the UK has a very good rental market, with a lot of demand for renting property. Interestingly, one of the big trends that emerged from post-lockdown property searches was that more people were looking to move away from the city, to quieter areas with more space.

Investment Opportunities for Overseas Landlords

From a property investment perspective, if people are moving out of the city and looking to buy property in the suburbs, this will potentially mean that more properties close to the city centres will go up for sale. Usually, these are the areas that property investors are looking to rent out, either for students attending the local universities or young professionals who work in the city. So, this could mean that once the house prices settle, more houses in the types of areas that are perfect for landlords would be available at good value.

The other big factor that will affect the UK property market is that mortgage lending criteria has become stricter due to the economic situation, which means those people who might have been looking to buy their own property might have to rent until the economy becomes more stable again. This of course, means that there are further opportunities for landlords, with rental demand remaining high for the foreseeable future.

Unemployment rates have been increasing throughout 2020 due to the health pandemic and the job market is looking increasingly challenging, especially with the government’s furlough scheme due to end in March, at which time companies may be forced to make redundancies. So, it is going to be harder for a lot of people to get their own residential mortgage than it would have been a year ago, before the impact of Covid-19 took hold.

Is a UK Property Crash Likely?

Initially, a lot of property experts were expecting a significant crash after the mini boom after lockdown, when sales started to go through again. The introduction of the stamp duty holiday has helped the property market to stay buoyant, with lots of sales going through but when the stamp duty holiday ends, sales are likely to slow down at this point.

However, with the Covid-19 vaccine having started to be rolled out, there is a more positive expectation for the property market for 2021 and beyond, so investing now should not see any drastic house value crashes. Property investment is most successful for those looking for long-term investments, so as long as there is the demand to live in rented properties, buying investment property in the UK is still very attractive opportunity right now.

Student Housing Demand

Landlords, and potential landlords, have been wary about the impact of Covid-19 on students applying courses and living in student housing. Perhaps surprisingly, there was an increase in the number of UCAS applications for undergraduate courses for the academic year of 2020/21.

When universities re-opened in September and October, the UK news was filled with updates regarding the high numbers of Covid-19 infections throughout the student population. Many students also complained about paying course fees when much of their course had to be delivered online.

Universities have been worrying about the impact on applications for the next academic year but with the vaccine expected to be available for the majority of the UK population before the new term, this should give students confidence in the university experience they will receive in the next academic year.

Another interesting factor regarding student applications is that there was a 9% increase in international student applications in 2020, as announced by UCAS. So, student applications were actually at an all-time high, despite the UK lockdown and with so many foreign students looking to study at UK universities, demand for student accommodation should remain high.

To find out more about how we can assist you with your Expat Mortgage requirements, please click here to get in touch

The impact of Brexit on students

There was a noticeable drop in EU undergraduates for 2020-21, which was largely attributed to the uncertainty of Brexit. As of 1 January 2021, students from the EU will require a study visa to attend a university in the UK, which could result in lower numbers of students coming from the EU this academic year. However, the numbers of students coming from China, India, the US, Hong Kong, Malaysia and many other non-EU countries has been rising in recent years.

This gives confidence to Overseas Landlords & Property Investors who are looking at renting property out to students and now that the vaccine has started to be rolled out to the UK population and also around the world, this should provide additional confidence that there will be a lot of demand for student accommodation for the foreseeable future. The UK remains a very attractive option for international students, with many UK universities having very good reputations around the world.

Demand for UK Rental Properties

We mentioned earlier that stricter lending criteria will be a barrier for many people who were hoping to get onto the property ladder in the near future. The UK mortgage industry had to adapt quickly to take into account the impact of furlough arrangements, where potential borrowers had their salary reduced by 20%.

Mortgage Lenders adjusted their criteria to manage the risks of furloughed workers not being able to afford their mortgage payments and also to try and mitigate the risk of many furloughed workers later being made redundant. 

Mortgage lenders have also had to provide payment holidays to their current mortgage holders, as directed to do by the government, so lenders have had a lot of new challenges to face in 2020 and are constantly working on setting out the best approach to lending criteria going forward.

The Bank of England revealed in August that the number of mortgage approvals in 2020 stood at 418,000 compared to 524,000 for the same period in the year previous. It is expected that the higher levels of unemployment and other economical factors in the UK will result in a reduction of approved mortgages in 2021.

This scenario can be advantageous for Expat & Foreign Property Investors because mortgage lenders will be looking to lend to applicants that are more likely to be able to afford to pay their mortgage. Unlike many industries such as hospitality that has been devasted by lockdown restrictions, property investors will often be deemed to be lower risk to lenders, as they have financial stability and different income streams.

UK Mortgages for Expat or Foreign Investors

While many mortgage lenders are tightening their lending criteria, using a Specialist Expat or Foreign Investor Mortgage Broker will help to find a good mortgage deal that will enable investors to expand their property portfolio in the UK.

Expat Mortgages UK are a whole-of-market broker that has access to every single mortgage deal on the market, which enables us to find our clients the best possible deal at the most attractive interest rate. Our experience and specialism in this sector also bring benefits such as working through the challenges of being a non-UK resident.

We work with a wide range of property investors from around the world and even if they have little or no UK credit history and their income is in foreign currency, we are still able to find the right mortgage solution to help them to succeed in buying UK investment or residential properties.

Foreign investors often struggle to obtain mortgages in the UK but at Expat Mortgages UK, we work with lenders who will take on this risk and we will help you to complete the application, so that it goes as smoothly as possible.

Our expertise will also help to ensure there are no unnecessary delays that can result in missing out on a property, so contact us today and we can get started on your foreign investor mortgage application.

To find out more about how we can assist you with your ExpatMortgage requirements, please click here to get in touch today.

Marketing No Comments

Where overseas investors own most properties

The London boroughs of Westminster, Kensington & Chelsea and Camden are some of the most popular with foreign owners.

Pure Property Finance analysed data from the Land Registry on overseas companies that own property in England and Wales.

There were 10,938 in the City of Westminster, 5,847 in Kensington and Chelsea, and 2,363 in Camden.

In terms of areas outside London, 1,770 were in Manchester and 1,516 were in Liverpool.

To find out more about how we can assist you with your Expat Mortgage requirements, please click here to get in touch

Ben Lloyd, managing director of Pure Property Finance, said: “Since we set up Pure in 2013, we have worked with clients across the UK and abroad to secure bespoke property finance that suits their specific project needs.

“In this time, we have definitely seen some ‘hotspots’ for investment, particularly in London and the South East, along the M4 corridor, as well as cities in the North West.

“Some of these areas are now becoming oversaturated and do not provide the opportunities they once did. However, others remain in high demand; high value locations will almost always hold their value and bring a solid long-term return on investment.”

Overseas investors will be charged a stamp duty surcharge of 2% from April next year.

BY RYAN BEMBRIDGE

Source: Property Wire

Marketing No Comments

Overseas investors target Scotland as property volumes rebound over summer

Property experts are banking on a strong end to the year after investment volumes in Scotland rebounded over the summer following a “Covid quarter” wipeout.

Investment volumes in the third quarter of 2020, covering July, August and September, reached £477 million, according to property consultant Colliers International’s latest snapshot.

That marked the highest quarterly figure in a year, though it was still almost 20 per cent below the five-year quarterly average of £564m. It comes after investment volumes slowed to a near standstill in the second quarter of this year, when the figure plummeted to just £35m.

The firm said there was hope for a strong end to the year with pent-up demand driving activity.

Oliver Kolodseike, associate director, research and forecasting, at Colliers International, said: “It is positive to see that transactional volumes have started to pick up again and we are now expecting a strong end to the year in Scotland as we recover from the ‘Covid quarter’.

“An annual investment total of £1.5 billion across all sectors would be a positive result given the nationwide lockdown earlier in the year.”

The firm’s analysis found that the office and alternative sectors accounted for three quarters of all activity by value, while investment volumes in the industrial sector were 40 per cent above its five-year quarterly average. Given the ongoing impact of the pandemic, activity in the retail segment was limited, Colliers noted.

There was a renewed interest in Scotland from Asia Pacific-based investors, who accounted for over half of all investment volumes. This included the quarter’s largest deal which saw South Korean Hyundai Asset Management purchase 1-3 Lochside Crescent in Edinburgh for just over £133m. The 247,500 sq ft asset is currently let to insurer Aegon.

To find out more about how we can assist you with your Expat Mortgage requirements, please click here to get in touch

The deal marked Hyundai Asset Management’s second Edinburgh purchase in less than 18 months, having already bought Gyle Square in April 2019 for £55m in one of Scotland’s other largest office deals that year.

Looking in more detail at investment in the office sector, a total of £186m was invested during the third quarter, only slightly weaker than the £196m transacted a year ago and marginally below the five-year quarterly average of £193m.

In one of Scotland’s other largest office deals this year, Singaporean Elite Partners Capital bought 150 Broomielaw, the 97,000 sq ft building completely let to Scottish Enterprise, for £40m.

Industrial investment activity picked up during the past quarter, with volumes reaching £80m, 40 per cent above the five-year quarterly average of £56m.

The figure was boosted significantly by the sale of Amazon’s one million sq ft logistics centre to Korean-based KB Securities for £66.8m, representing the second-largest industrial deal ever recorded in Scotland.

Patrick Ford, director, national capital markets, Colliers International in Glasgow, said: “It was good to see this relatively strong investment performance in the industrial sector in Scotland’s two biggest cities in Q3.

“Overseas investors, particularly those located in Asia, remain very interested in the Scottish industrial sector and large deals continue to be done, despite global economic uncertainty on the back of Covid.”

By Scott Reid

Source: Scotsman

Marketing No Comments

Why more first-time buy-to-let investors are looking at UK property

New landlords and investors from both the UK and overseas are hoping to enter the UK housing market. What’s behind the rise?

The number of people searching for property in the UK for buy-to-let purposes is booming, according to new research from Legal & General. And the biggest increase in demand has been from first-time investors and landlords over the past few weeks.

The insurance firm says it has seen an 18% increase in people searching for terms such as ‘first-time buyer’, ‘first-time landlord’ and ‘non-owner occupier’. This spike has been most prominent since the start of September.

‘Holiday lets‘ was another popular search term on the company’s site. This is likely to reflect the rise in ‘staycations‘ across the country as people’s international travels are restricted. The trend had already been growing as more people have chosen to holiday within the UK in recent years.

Good time to invest?

The UK housing market as a whole has seen a surge in demand over the past few months. Movers and buyers who had held off in March and April have been taking action since early summer.

To find out more about how we can assist you with your Expat Mortgage requirements, please click here to get in touch

After Rishi Sunak announced a stamp duty holiday for the first £500,000 of a property purchase, buyers were further spurred on. And in the buy-to-let space, despite the 3% surcharge that still applies, interest also increased. Buy-to-let investors can still save thousands of pounds in tax thanks to the stamp duty change, which ends next March.

The data from Legal & General also showed that searches for ‘expat not in UK’ had increased by 50%. Most of these searches were in seek of buy-to-let mortgages, the firm added.

Interest from the expat community in the UK property market is nothing new. With sterling continuing its low performance against the dollar, many overseas investors believe it is a good time to buy property here. It is also seen by many living abroad as a “safe haven” for investment, compared to many other markets.

“Our latest findings from SmartrCriteria suggest a growing number of first-time buyers are searching for mortgages for buy-to-let ventures, including those engaging with the growing trend towards staycations this year.”

Mortgage market changes

Mortgage rates remain incredibly low right now, although they are beginning to inch up. This is further attracting property investors to the market, whose borrowing costs directly affect their bottom line.

Lenders are continuing to approach the current situation with caution, though. While rates are competitive, the number of products available remains lower than at the start of the year. Those looking for higher loan to value options may struggle the most.

But according to Kevin Roberts, most lenders are willing to consider a wide range of borrowers.

“There have been thousands of criteria changes since the lockdown and mortgage advisers are supporting seasoned property investors, first-time landlords and other buyers to find lenders and products that meet their needs,” he comments.

Options for first-time landlords and investors are changing all the time, so getting independent financial advice can be helpful.

One of the latest lenders to offer specialist product to first-time investors is LendInvest. They have launched a new range of products which offer up to 80% LTV for student lets and new landlords.

The maximum loan amount is £500,000 at this level. However, for those with a bigger deposit, loans go up to a maximum of £1.5m on standard properties. There are also options for multi-unit freehold blocks up to £3m, as well as houses in multiple occupation (HMOs).

Source: Buy Association

Marketing No Comments

London’s housing market lures Hong Kongers seeking safe haven

Wealthy Hong Kong residents seeking to escape the city’s political upheaval are flocking to London, offering a potential lift to the capital’s ailing luxury housing market.

Realtors are seeing a surge in interest from Hong Kong, driven by falling prices, favorable exchange rates and Prime Minister Boris Johnson’s easing of immigration rules for many residents of the former British colony. The number of Hong Kong clients registering with upmarket real estate agency Chestertons is up nearly 80 per cent this year compared with 2019, while inquiries at Black Brick Property Solutions and Beauchamp Estates are up by about a fifth.

An influx of Hong Kong buyers would give a boost to London’s prime residential market, where prices have fallen by more than 20 per cent since 2014, according to broker Knight Frank. Investors from the Asian financial hub accounted for nearly 10 per cent of London luxury home purchases in 2010, but that share declined steadily in the following years before starting to pick up in 2019.

The increased interest came as mass protests rocked Hong Kong, accelerating after a political crackdown by China, which imposed a new national security law at the end of June. In response, the U.K. said it would allow almost three million holders of so-called British National (Overseas) passports to move to Britain. That’s helped make the U.K. the biggest draw at property exhibitions in Hong Kong, according to property app Soho.

To find out more about how we can assist you with your Expat Mortgage requirements, please click here to get in touch

“Unlike wealthy buyers from the Middle East or the U.S, Hong Kongers are probably looking to relocate permanently to the U.K.,” Camilla Dell, managing partner at Black Brick, said in an interview. “There will be potential for more buyers as a result of BNO holders being told they’re welcome with open arms.”

Hong Kong buyers are drawn to London by its comparatively cheap prices. The average value of prime London homes was $1,830 per square foot in June, compared with $4,440 in Hong Kong, according to Savills Plc. They also benefit from the exchange rate. Since the peak of the market in 2014, buyers with Hong Kong dollars have reaped a relative discount of 40 per cent, twice the price decline in pound terms, Liam Bailey, Knight Frank’s global head of research, said in an emailed reply to questions.

While London’s luxury market is struggling, the country’s housing market as a whole is on the up, stoked by government support programs that are part of its efforts to restart the economy.

The spike in Hong Kong buyers’ interest is also a response to changes in the U.K.’s sales tax on property purchases. A temporary tax break will expire in March, while a new higher rate on overseas buyers kicks in the following month.

“Buyers from Hong Kong are driving the luxury residential market in London at the moment,” said Kathrin Hersel, property director at Almacantar, a developer and investor whose inquiries from Hong Kong have more than doubled since mid-March from the year-earlier period. And in recent months, they’ve started to take a longer-term view of the market.

“A year ago we were probably taking more inquiries for rental investments,” Hersel said. “Now these buyers want second homes.” – Bloomberg

Source: NST

Marketing No Comments

Benham and Reeves: Foreign buyers should invest in UK property now

With the temporary changes to the stamp duty threshold in place until March 2021, and a 2% surcharge for foreign buyers set to come in from April, now is the time for overseas buyers to invest in UK property, according to Benham and Reeves.

The current stamp duty holiday means that foreign buyers are able to save £14,573 on the average London property purchase.

The April 2021 surcharge will take the average the cost of stamp duty up to £38,579.

For foreign buyers making their move now, this means an additional £24,006 saved in addition to the sum already wiped off by the stamp duty holiday.

Kensington and Chelsea offers the most significant additional saving for foreign buyers transacting at the moment; the cost of stamp duty on a current purchase has reduced from £125,243 to £110,243, a saving of £15,000.

Come April next year, this stamp duty requirement will climb to £153,165 with the additional foreign buyer surcharge, so international buyers transacting before this are saving a further £42,922.

Similarly, foreign buyers looking to buy in Westminster can save £36,699 by transacting now, while Camden (£32,621), Hammersmith and Fulham (£29,943) and Hackney (£27,773) were also found to offer some of the best savings.

To find out more about how we can assist you with your Expat Mortgage requirements, please click here to get in touch

In the last year, house prices in the City of London have fallen by £60,868 on average; combined with the £30,851 stamp duty saving made by buying now, foreign buyers would be £91,720 better off on average at present.

In Brent, a £28,463 reduction in property prices coupled with a £21,287 stamp duty saving means that foreign buyers would be £49,750 better off buying now.

Richmond has also seen property prices decline by £12,875 in the last year; with the addition of a stamp duty saving of £27,670 ahead of April’s surcharge, foreign buyers would be £40,545 better off on average as a result of buying now.

Marc von Grundherr, director of Benham and Reeves, said: “The recently implemented stamp duty holiday has not only rejuvenated domestic buyer demand, but we’re also seeing foreign buyers starting to return to the capital in their numbers. In fact, the vast majority of our buyer interest coming from Asia has only been concerned with homes falling under the £500,000 threshold.

“This has been intensified due to the sour taste of a two per cent stamp duty surcharge on the horizon as the government continues to dampen what is a vital sector of the London property market.

“In any case, the stamp duty savings currently on offer have been heavily bolstered by the additional saving made in comparison to buying from April next year and this has caused an immediate uplift in buyer demand from foreign shores.

“Great news for developers who with stock currently, or due to hit the market in the coming months.

“What’s more, some boroughs have seen property prices reduce over the last year and so foreign buyers are not only able to save considerably where stamp duty is concerned, but they’re securing even better value in terms of the price of the property itself.

“London remains the pinnacle of homeownership for many foreign buyers, and while a ramped-up level of stamp duty will be hard to swallow, it certainly won’t deter buyers in London’s high-end market.

“However, with many rushing to make the most of the savings currently on offer, any negative price trends that have plagued the capital in the last 12 months are sure to be short-lived as demand starts to outweigh supply.”

By Jessica Bird

Source: Mortgage Introducer

Marketing No Comments

Stamp duty changes spur rise in interest from overseas buyers

Mortgage searches by advisers around visas and non-UK residents has seen a significant rise according to Legal & General Mortgage Club. Data from the SmartrCriteria tool, which helps advisers to determine whether a particular lender would consider a mortgage application from their client, shows that criteria searches related to ‘visas’ were ranked as the most searched term at the end of July.

Throughout July, mortgage searches by advisers for ‘expats not in the UK’ also featured in the top 10 search terms, whilst a search combination of ‘expat not in the UK’ and ‘foreign income’ has remained in the top five searches by advisers. According to the data, one in every 22 residential searches is for a query relating to an applicant currently on a visa or an expat not based in the UK.

The data also suggests that a growing number of overseas buyers are also reacting to recent changes to stamp duty, which include a 2% surcharge for non-UK buyers beginning in April 2021. SmartrCriteria searches related to applicants on a visa showed a 146% for buy-to-let searches, as well as 97% for residential criteria enquiries since May 2020. Of the residential visa searches made in July by advisers, 88% of applicants have a Tier 2 or other working visa and the majority (71%) have been in the UK for two years or more.

To find out more about how we can assist you with your Expat Mortgage requirements, please click here to get in touch

The rise in visa-related enquiries coincides with increased interest from Hong Kong-based buyers as they turn their attention to the UK housing market. Recent industry data has shown a surge in demand from Hong Kong based buyers, which could grow further following the Government’s announcement on 22nd July of a new route to citizenship for 300,000 British National Overseas passport holders.

Kevin Roberts, director at Legal & General Mortgage Club, said: “Britain’s housing market is bucking the trend and has faced unprecedented levels of demand since reopening in May, and now figures show that a growing number of overseas buyers are also taking interest in UK property. Our SmartrCriteria tool is tracking some of the key industry trends in the mortgage market’s new normal and shows recent announcements from the Government have clearly gained the attention of non-UK based buyers. Many are now looking to take advantage of the stamp duty holiday while also investing in the market before the 2% surcharge for overseas customers takes effect.

“Our latest figures also coincide with increased interest from Hong Kong buyers, who are now looking to the UK housing market as a ‘safe haven’ amidst political uncertainty in the territory.

“There is an opportunity for advisers to support many of these buyers, particularly if they have little to no credit history in the UK. Lending criteria is changing every day in the mortgage market at the moment, and advisers will be key in helping these borrowers and others to cut through the noise and find the best product for their particular circumstances.”

Source: Property Wire

Marketing No Comments

Expat buy-to-let enquiries surge following stamp duty changes

One week after the Chancellor announced a stamp duty holiday on the purchase of property in England, Skipton International has reported a sharp increase in its buy-to-let mortgage enquiries.

The buy-to-let lender says UK expatriates and foreign nationals have been quick to register their interest in investing in UK property to let, with the bank experiencing enquiries at double the value of usual business.

In the seven days following that announcement that stamp duty would be waived on all English properties up to the value of £500,000, Skipton has reported a 61% rise in usage of its online mortgage calculator for UK buy-to-let mortgages estimates.

To find out more about how we can assist you with your Expat Mortgage requirements, please click here to get in touch

Jim Coupe, managing director of Skipton International, said: “This initial response to the new stamp duty measures is very encouraging and demonstrates that the changes are driving more interest to the UK property market. We have always seen the UK buy-to-let market as an extremely important area of our business and are anticipating that many of these enquiries will convert to successful mortgage applications in the coming months. As a responsible lender we have to be mindful of prevailing circumstances but will be doing whatever we can to assist buyers in their search for long term investment property.

“Now could be a good time for overseas purchasers to consider investing in UK property, with the stamp duty holiday due to last until 31 March 2021, at which time a proposed additional 2% stamp duty land tax charge for foreign residents will come into effect. This window of opportunity could offer substantial savings with those buying a property priced at £500,000 generating savings of up to £25,000.”

By ROZI JONES

Source: Financial Reporter

Marketing No Comments

London is still calling to international investors

With flights grounded and uncertainty hanging over the global economy, it would be easy to think that foreign buyers have paused their activities in London’s property market.

Yet despite the fallout from the Covid-19 pandemic, deals are still being done. As a buying agent for overseas investors, we’ve exchanged on several prime residential properties and a commercial unit in the capital since the lockdown was introduced.

Like many businesses, my team at PSS London – a property consultancy firm dedicated to securing both residential and commercial opportunities – has had to close its offices in London and Istanbul during this period. But we have made the most out of a tricky situation by attending industry webinars and running Zoom meetings between clients, solicitors and bankers.

Since Britain entered lockdown, we have been hitting the phones every day to give our clients market updates and to keep them informed about the London property market, both in terms of its housing market and its commercial one. Given many of my clients are thousands of miles away and unable to travel to London any time soon, feeding them the right information and keeping their trust has been more important than ever before.

Even with all the current unknowns, if clients trust you and know you are bringing them a good deal, they are often happy to press ahead with their plans

Even with all the current unknowns, if clients trust you and know you are bringing them a good deal, then they are often happy to press ahead with their plans.

To find out more about how we can assist you with your Expat Mortgage requirements, please click here to get in touch

In fact, we think that this period is a great time to negotiate a deal. Buyers that we are advising now have the full attention of many developers that are bringing new-build homes to market. Before this crisis, many senior management teams were too busy to fit in meetings with clients, but we can often get them involved now as they have more time and everybody is desperate to do some deal-making.

Looking forward, in the residential market I think there will be a ‘discovery’ stage where both buyers and sellers will wait and collect more information before working out where they stand on pricing.

Blockbuster deals

In recent years, we’ve completed some blockbuster deals in London’s residential market, from units at One Tower Bridge to apartments at 199 The Knightsbridge.

I believe this fundamental demand we have seen in the past is not going away. Buyers remain financially buoyant and there will be a real eagerness to snatch up a great investment opportunity.

As an agency business that looks after overseas investors, our position will remain the same over the coming three to four months: we will continue to actively promote deals remotely until international flights operate as normal and the universities are fully open in the UK.

It is not just the residential markets where there are bargains to be found. One of the biggest opportunities coming out of this crisis will be in London’s commercial property sector. We are expecting investment volumes in this space to fall to the kind of levels that we have not seen since the financial crash of 2008.

However, there will be fewer corporate buyers on the market, and this will create good opportunities for individual buyers and family offices. Clients will not need to compete against as many pension funds when trying to buy assets and there will be more time to digest and analyse the commercial deals coming through the process.

Sectors that were under pressure prior to the current crisis will remain under pressure, and we do expect to see more bank-led sales of retail assets as distress on the high street continues to mount.

Having in-depth expertise in the UK’s commercial property market is crucial, especially as values at the moment are difficult to determine. We are regularly updating our clients with new listings that have the potential to generate high returns on investment, whether small retail units or larger mixed-use blocks.

Commercial prestige

In 2012, we acted for a private investor who snapped up a trophy virtual freehold retail unit at London’s exclusive One Hyde Park development (pictured). This was resold in 2019 with a healthy profit. We’ve also acted on two large commercial deals in nearby Mayfair, both for circa £40m, in 2017 and 2018 respectively. These sorts of deals don’t come around every day, but with London still viewed as one of the world’s safest and most popular cities, we’re expecting famed districts such as Knightsbridge to keep their commercial prestige in spite of the current volatility.

It has undoubtedly been a tough few months for real estate. But we should not forget that the lockdown was introduced shortly after the news that Britain was definitely leaving the EU following the government’s decisive election victory. The election result meant we were all hoping for and expecting a good recovery in the property sector.

Unfortunately, this pick-up didn’t really happen, and just as we hoped for activity to return to the market, the Covid-19 pandemic disrupted all parts of the global economy. But after almost four years of Brexit-related uncertainty, many buyers and sellers are fed up of sitting on the fence. Lots of them are already near to closing deals and securing opportunities. It is still going to be a time-consuming process, but the motivation is there.

Information is everything. As the UK government gradually starts to ease lockdown measures, overseas investors will need to be kept in the loop when it comes to mortgage consultation, legal guidance, immigration rules and the general market outlook. Buying agents such as myself will look to use our experience and insight as much as we can.

Despite all the difficulties of the past few months, we at PSS London are coming out of this period with a positive outlook. For overseas investors, London’s fundamentals are as strong as they always have been, whether it’s the education system, the rule of law or even the open green spaces across the capital. There has never been a better time for buyers and their agents to search for new opportunities.

By Emre Bilgin

Source: Property Week