Investment in UK real estate reached £25.9 billion in the first half of this year compared to the same period in 2016 – up 10% – according to Jones Lang LaSalle.
London helped drag the rest of the UK to the year-on-year gains – the volume of deals in the capital were up 49%.
While domestic investors seem to be keeping cards close to their chest, and amid a few overall concerns about the impact of the Brexit talks, the report found bullish optimism from abroad overall.
“Overseas investors view the UK as attractive and their appetite for large lot sizes is a vital driver of demand,” UK Capital Markets Report: H1 2017 said in summary. “The outlook for slower economic growth may weigh on sentiment indicators, but recent experience suggests that demand is resilient and that UK real estate will continue to benefit from rising allocations and the global search for yield.”
Central London was up 33% in terms of deal volumes compared to last year, standing at just over £11.2 billion, with Greater London overall cashing in at just over £14 billion. Wales saw deal volume zoom 175% to £300 million, with East of England, the South West and Yorkshire & Humber the only other regions seeing growth.
The demand is remarkable given the country had economic growth of just 0.2% and 0.3% for the first two quarters of this year, respectively.
The industrial sector caught the eye in particular, with deal volumes rising 34% against last year and making up 13% of the total deal volume across the board. Investment in office space made up 46%, the largest sector, followed by retail.
Almost a third of investors were pooled funds – that is, a couple of investors clubbing together – while individual private investors made up just 7%. Hong Kong was shown to be a major source of funds – the city state made up 25% of the cross-border deal volume over the period.
UK mortgage consideration?
Lending may get noticeably tighter from next year if banks heed the Bank of England’s warning about tightening up their credit practices for their own good.
For now, expatriates in the UAE as elsewhere, have many options when it comes to the UK lenders willing to look at non-residential mortgages. If you were looking to join the queue of investors looking to buy in the country, now could be a good time.