The UK is obsessed with property – and UK property attracts investors from around the world. This is unsurprising, considering there has been no 5-year period showing a loss for investment into UK residential property since records began in 1973.
Now, in a surprise move, the UK has decided to leave the European Union – so what does that mean for investors – and is now a time of opportunity for international investors into UK property?
The situation after Brexit
With recent events causing a sharp decline in the value of the pound, overseas investors have a window of opportunity to buy UK property at a significant discount to previous levels.
The market so far seems largely unshaken with the major house price indexes showing little change, or even some growth. This is because the fundamental supply and demand imbalance holds true: – the UK has a major shortage of homes, and this crisis is not being solved effectively, which will continues to provide upward pressure on prices.
The best performing investment
Over the past twenty years, residential property has been the best performing investment by a long way. Take a look at the graph below:
A ‘lower risk’ investment
If you thought your investments were safest with gold – you were deceived. Unless you’re willing to settle for a disappointing relationship with your savings account, residential property comes solidly second as the next lowest risk investment. See below:
Residential represents a lower risk investment, with higher rewards – it’s a real asset of bricks and mortar, and brings in rental yield. Furthermore, residential acts as a strong hedge against wider volatility in the market, as the drivers of supply and demand in the housing market are not closely correlated to the performance cycles of other assets.
There could be no better evidence of this than during the Global Financial Crisis. From its peak in February 2008 to its trough in April 2009, residential property in England and Wales fell 14%. The FTSE All Share total returns index, which peaked in February 2007 and bottomed out in February 2009, fell 41%. While gold served as a safe haven during the Global Financial Crisis, in the longer term it has proven volatile, and significantly underperforms residential property.
An easier way to invest in UK property
Property is the best performing, and lowest risk of the major asset classes in the UK – and now foreign investors have the added advantage of a weakened british pound. However, residential property has been hugely difficult to invest in, until now.
Property Partner makes it easy for anyone to invest in property, by allowing investors to own a fraction of a property, and earn rental income on their share. Investors can invest as much as they like into as many properties as they like, starting from just £50. We deal with all the hassle of letting and managing the properties – and every property has been hand-picked by one of the UK’s top property experts. Click below to find out more.