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THE PLUNGING value of the pound may be of concern to Brits back home with imports of goods and holidays abroad becoming more expensive but for expats living in the kingdom it may be an ideal time to invest in the property market.
London has been a magnet in recent years for Bahraini and other Gulf investors too but it appears Brexit has taken a shine off the English capital with eyes now firmly fixed on commuter belt areas and the country’s ‘second city’, Birmingham, with enticing new rail investments keeping them on track for success.
SevenCapital, one of the largest privately-owned real estate investment and development companies in the UK, is hosting a ‘UK Property Market Update – Where is the best place to invest in the UK and why?’ presentation at the Capital Club in Harbour Towers on Monday with senior investment consultant, Johnny Conran.
“As an overseas investor now is a great time to invest in the UK,” he told GulfWeekly. “The opportunity that the weakened pound brings is undeniable and we have seen huge investment from our overseas market in both the Middle East and Asia over the last 12 months. There is no denying that parts of the UK are performing better than others, but one of SevenCapital’s strengths over the years has been investing in ‘hotspots’ that benefit from both strong yields and substantial capital appreciation.”
It’s the 30-year-old Londoner’s return visit to Bahrain after a similar business presentation following the shock of Britain’s decision to leave the European Union. The referendum in June, 2016, stunned the world when ‘leave’ won by 51.9 per cent to 48.1 per cent, with more than 30 million people voting. “Due to its success as well as further developments in Brexit negotiations and its implications on the UK property market, I thought it would be fitting to do the same again,” explained Johnny. “SevenCapital has been heavily investing throughout the year which brings with it new opportunities for our investors.”
Since its inception 10 years ago, SevenCapital boasts an existing portfolio of development worth over £1.25billion. With offices in Birmingham, London and Dubai, it offers fully managed, off-plan property investments in key regional cities experiencing substantial growth.
Johnny has advised expat clientele in both the Middle East and Asian markets, with a primary focus on high-yielding, regional property investments in the UK.
The chilling effect of Brexit on London’s real estate market is just getting worse. House prices in the capital, traditionally one of the more crisis-proof assets in the investment universe, are now falling at their fastest rate since 2009, according to new data.
“London’s real estate has certainly been affected over the last 18 months,” said Johnny. “Lower transaction volumes, as well as a drop in the number of forced sellers, has seen the London house prices stabilise.
“The turnover in housing has dropped by 17 per cent since 2015 and London’s rate of growth has been 2.8 per cent over the last year, the lowest it has been in more than four years. To put this into context, this puts London only just within the Top 20 cities in the UK in terms of growth.
“The fall in prices was inevitable, in the years leading up to the EU referendum the sharp jump in prices meant it was simply not affordable for Londoners to buy in central London, thus the market was due the correction that it is seeing now. The positive news as that with change breeds opportunity and other parts of the UK are now benefiting from what is happening in the capital.”
One prime example is Birmingham, the fastest growing city for house prices in 2017. The Midlands city has seen average prices rising 7.8 per cent over the past year to £154,900, according to UK cities house price index by Hometrack.
Every year PWC and the Urban Land Institute release a report called ‘The Emerging Trends in Real Estate’. For the last three years it has ranked Birmingham as the top performing city in the UK, reaching sixth in the whole of Europe in 2016.
“The Birmingham story is fantastic and its success is long overdue,” said Johnny. “Being the second city in the UK by population and closer to London than its comparables - Manchester and Liverpool - the city frustratingly lacked any investment and exposure.
“This all changed with the ‘Big City Plan’ which was launched around five years ago now. A new station rivalling anything in the capital, Grand Central, infrastructure redevelopment throughout the city and huge job creation has made the already apparent lack of city centre properties even more acute.
“This supply and demand imbalance has brought great investment opportunity within the city, something that SevenCapital has been the pioneers in addressing with more than £300million of development under construction in the city centre.
“More jobs are always being created with HSBC notably moving its headquarters for commercial banking from London to Birmingham as of January 2018 and the HS2 train line project already requiring a workforce having achieved Royal Assent.
“Not only is Birmingham growing at a higher rate than anywhere in the UK, 8 per cent, but it is also achieving the highest yields in the UK at 6.2 per cent. More importantly, even with all the job creation and re-development we are seeing, prices still haven’t reached the heights of 2007 which means the investment opportunity is very much still there.”
Along with Birmingham City Centre, SevenCapital is also focusing their investments on the London commuter belt.
“Our latest and anticipated launch is in Slough, which sits just 18 minutes from London Paddington,” revealed Johnny. “Strong transport links will always add value to any property asset.
“Both Birmingham and Slough share huge value from two of the governments most innovative transport investments in recent years.
“HS2 will connect commuters from Birmingham to London in just 49 minutes and Slough will be one of the commuter areas to benefit from Cross Rail which is a mere 18 months away from completion.
“Our site in Slough could not benefit more as it is less than 100m away from the Cross Rail station, making this a much-awaited project for all of our investors. In recent weeks Slough has been in the press for having the highest amount of tenants who have moved from central London than anywhere-else in the UK.
“This bodes well for investors as it is a clear indication of high demand, even before the much anticipated Cross Rail arrives.”
l The UK Property Market Update – Where is the best place to invest in the UK and why? Event takes place at The Capital Club on Monday from 6.30pm-8.30pm. To register email events@sevencapital.com, call +971 544 118179 or visit www.sevencapital.com
