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THE UNITED KINGDOM
A Well-Developed Nation with Vast Growth Opportunities
The UK property market continues to attract capital from British and overseas investors. The year 2019 saw a record level of property investment in the North West of England, with Manchester and Liverpool leading the way for Buy-to-Let properties. These cities have outperformed all other regions of the United Kingdom, showing the highest growth in sale prices and in rental income for investors.
As the country exits the COVID-19 lockdown it is likely to enter a sustained recession with falling property prices. Against a backdrop of stock market uncertainty and low-interest rates, we expect the investor community (as was the case with after the 2008 financial crash) to see a fall in housing price as an opportunity. Conversely, there will be an additional and urgent burden on local authorities to provide accommodation due to the recession.
Why Invest in Property in the North West of England?
The average three-bedroom house price in the United Kingdom is £100,000. These relatively low prices, matched with low mortgage rates, and a weak pound in relation to the Shekel and Dollar make it an attractive market to invest in. We target properties priced 5% to 20% below market value in order to maximize your investment.
High Rental Yields
Properties in the North West of England can earn between 6% to10% in net returns per year. With financing, yields can reach up to 10% to15%. Six Liverpool neighbourhoods are in the top 25 Buy-to-Let yields areas in the UK. Rental growth continued upward in 2019 despite the challenges presented by Brexit, and we expect this to continue to grow by a further 10% over the next five years.
We attribute this to the private rental sector being dominated by Millennials, who make up the largest sector in the British housing market. Rental yields in Liverpool and Manchester are the highest amongst major Western European cities and higher than those in many Eastern European cities, without the volatility and risk inherent in those markets.
Potential for Strong Capital Growth
Capital appreciation in the North West of England is expected to be 20% to 25% over the next five years, primarily due to the government investing billions into the economic growth of the region.
Home prices in the United Kingdom as a whole are projected to rise by 15% over the next five years thanks to reduced interest rates, a weaker pound, an increase in net disposable income, and an increase in British employment.
The Northern Powerhouse is the British Government’s extensive investment program for the region, responsible for 13 billion pounds of new infrastructure, connectivity, business incentives, skills, and cultural activities. The most recent budget set forth in March 2020 by the British Government calls for 600 billion pounds to be invested in the United Kingdom’s transport and industrial sectors, many of which are centred in the North West of England. In addition, the local authorities in Liverpool and Manchester are investing heavily in their cities and creating true alternatives to London as centres of business and culture.
The ease of mortgage financing for foreign buyers in the United Kingdom makes it an attractive investment destination. Whereas in the United States, Europe, and Israel purchases require either cash or large deposits, foreign buyers in the United Kingdom can finance up to 75% of their property purchase with low-interest rates.
Ease of Doing Business
The United Kingdom is ranked second in ease of doing business in both Europe and the G7. Britain's bureaucratic system is highly digitalised and efficient. Other popular real estate investments destinations such as Greece and Portugal are ranked 72nd and 34th respectively.
In most cases, UK taxes are zero or below most other countries' thresholds, meaning you are expected to pay income tax only in your country of residence.
Lowest Ever Pound Rate
Due to the low value of the British pound in relation to the basket of the main global currencies, there is a difference of 18.9% over the past five years, resulting in the increase of buying power.