Overseas investors bought 58% fewer properties between 2019 and 2020, with 2021 figures so far pointing towards another significant drop.
An estimated total of just £3.3bn has been paid for properties across the UK since January, compared to around £9.4bn in 2020 and £16.6bn in 2019.
The data comes from SmartSearch’s analysis of the HM Land Registry’s ‘investment into UK property’ dataset.
John Dobson, chief executive at SmartSearch, said: “When selling to someone outside of the UK, it’s so important to do your research. Of course, this is the case when selling property to domestic buyers too, however there’s a lot more to consider when the sale is international.
“The best thing to do is find specialists who have expert knowledge of carrying out a sale to an overseas investor. Do as much research as you can on the country you’re selling to and work with your solicitors to ensure all checks and paperwork are completely watertight.
“Finally, build in as much time as possible for the sale – often more than you may think you need. This will give you some buffer time for any additional AML checks that may need to take place.”
Look North
Greater London aside, in the past five years investors have targeted Greater Manchester, West Yorkshire and Merseyside, in that order.
The North is seeing heavy government investment via the Northern Powerhouse initiative, with more than £3.4bn achieved in northern growth deals so far.
As a result northern cities like Manchester and Leeds are leading the way when it comes to rising house prices.
Savills has predicted that these areas will continue to see a surge in property values of up to nearly 30% in the next five years.
The government is focusing on developing northern cities into thriving business hubs with increased transport links to the capital, which is drawing interest from property investors in and outside the UK.
Basically rats leaving a sinking ship! UK property was seen as a safe investment for those especially from dodgy or corrupt regimes who wanted to hide their ill-gotten gains and have somewhere nice to live when it hit the fan back in their home country.
While some of these investors might be corrupt they are collectively not daft, they can see the writing on the wall as far as UK property is concerned. They won’t be able to buy up blocks of apartments and leave them empty while the price goes up, property prices will stall as money becomes tight. They will be faced with huge Council tax rises and the possibility of having their properties requisitioned by Councils to house the increasing homeless on controlled rents and eviction proof tenancies. No point in buying office blocks either, many will stand empty as WFH is here to stay.
As the UK becomes collectively poorer, life in the UK will become grimmer, as crime increases and public services are squeezed it will become a less attractive place to live. The smart money will be moving elsewhere.