Real estate investments in the UK
The UK has historically been a preferred destination for real estate investors from all over the world and Brexit has made it even more attractive partly thanks to the resulting weakening of the pound. A real estate investment in the UK is now more than ever a safe and lucrative option.
Why invest in real estate in Manchester, Liverpool or Leeds?
Constantly growing population
The most important factor to be considered is the relationship between supply and demand. This indicator is directly influenced by demographic changes. Unlike in other advanced economies such as Italy or Japan, the
British population is in fact expanding: according to the Ofce for National Statistics in London, from 66 million in the last census in mid-2018, the number of inhabitants is estimated to exceed 73 million in 2041. Other social dynamics like divorces, increased number of singles, immigration, young people who cannot aford to buy a house further highlight how the demand for rented properties will steadily increase over the coming years.
73 MILLION INHABITANTS BY 2041
An imbalance between supply and demand
Another very important aspect is the fact that the supply of housing in the UK is now chronically no longer able to keep up with the growing demand. In the last 30 years, in fact, new buildings have not kept up with the demand for housing. If in 2018 the historic record of 200,000 new buildings was reached, this figure is still far from the 300,000 annual units that the market would require. Following this trend, over the next ten years the housing deficit could exceed 1 million units, with the obvious consequences on the growth in the value of existing properties. Not only that: with a population density of 402 people per square kilometer, Great Britain
is four times more populated than France and over the next 20 years it will be twice as populated as Germany.
402 PEOPLE PER SQUARE KM
Increasing demand for rental properties
In Britain, demand for rental properties has been historically low. However, the trend in recent years shows that the increase in the number of single people is linked to an increase in demand for rental accommodation.
The percentage of the population living in rented accommodation has risen from 10% in 1996 to 20% in 2017. This means that for an investor it currently is as easy as it has ever been to find suitable and reliable tenants.
20% OF THE POPULATION IS LIVING IN RENTED ACCOMMODATIONS
Cash flow and political stability
One of the most important aspects of a sustainable real estate investment is a positive cash flow. And as far as Great Britain is concerned, we must insist on the relationship between supply and demand. The net return on a cash flowing property is among the highest in Europe. This makes it possible to drastically reduce the randomness and volatility of investment performance. It should also be kept in mind that despite the hustle and bustle of Brexit (which, on the other hand, provide benefits as they were called in terms of weakening the local currency), the United Kingdom remains the fifth largest economy in the world and the political and regulatory environment is characterised by a security and stability typical of developed countries.