With countries such as the UAE and Oman experiencing serious slumps in their economic growth and rental markets many Middle Eastern property investors are starting to look further afield for their next purchase.
Dipping oil exports have impacted on a number of regions within the Middle East and their economies are suffering. Oman has recently had its credit rating downgraded and the property markets are being hit hard. Abu Dhabi is seeing high vacancy rates throughout the city and rents are expected to slide by as much as 7% this year. Sales values could drop by as much as 10%, leaving investors looking elsewhere or opportunities.
The UK Property Market
The UK is seen as a good place to invest thanks to a weakened pound. Despite short-term uncertainties such as the departure from the European Union, the UK is still a relatively safe and stable place in which to invest your money. It is believed that as one of Europe’s biggest customers, the UK will be in a strong position to negotiate trade deals.
An ageing population has lead to a growth in the number of retirement and care homes that are needed. Whilst the population may be getting older, many of these pensioners have money to spend on luxury accommodation and care in their latter years, and with life expectancy in England and Wales expected to rise to 85.7 for men and 87.6 for women by 2030, these homes will be getting a lot of use.
The percentage of over 65s in the UK is now 17.8 and this is expected to rise to 23.6% by 2035. This creates a certainty over demand for these retirement homes, but there is currently a serious under-supply, with only 4% of those over 65s living in a retirement home or extra care village. Other Western countries such as the United States, Australia and New Zealand house between 13% and 17% of their over 60s in this type of accommodation.
With strong market growth potential, this type of property offers an attractive hands-off option for an overseas investor.
Another growth area in the UK is that of student property. With 16 universities in the global top 100, it is an attractive place to study, and is the second most popular destination with overseas students. The devaluing of the pound has also made it cheaper to study in the UK and with only 6% of students coming from Europe; Brexit is unlikely to impact greatly on student numbers.
Various cities across the UK, such as London and Liverpool, boast huge student numbers coupled with areas of significant cultural interest, making them consistently attractive. Self contained apartments within blocks of purpose built student accommodation generate healthy net incomes and almost guaranteed occupancy.
Overall, the UK presents opportunities for overseas investors that have significant long-term growth ahead of them and a healthy yield, with little to no work required from the investor themselves, making it a very attractive investment destination.