What Brexit means for South African Property Investors
With the ‘Brexit uncertainty’, the buyer’s market in the United Kingdom is creating opportunities for savvy investors.
While UK property prices have flatlined in cities like London, they are still growing in other regions as investors look for yields and value for money.
So, what does this mean for South African investors looking to get involved in the buy-to-let market in the UK post-Brexit?
Investments for South Africans
The bigger and more immediate argument is that the Great British Pound (GBP) is weak, and so for international investors, there is an opportunity to buy property at an effective discount. As soon as any deal is finalised, the pound will bounce back and so there is a clear argument why people should do something as soon as possible.
Once the dust has settled post-Brexit, all indications are that the property market will gain momentum, which means now is the time to get into this investment class.
Prices start from around £50 000 (R880 000) and have gross yields of around 9%. These properties are all fully managed to make them ideal for offshore investors who want to own and enjoy good cash flows.
Prices start from around £50 000 (R880 000) and have gross yields of around 9%.
According to SA Commercial Prop News, “activity in the UK property sector has seen South African Investors conclude 29 deals with a combined value of R3.38 billion (£190m) in the past few years.” These deals were advised to South African investors by UK building and project consultancy, Paragon.
Look to the Future
Brexit chaos is battering the UK property market, but SA investors with an appetite for volatility are snapping up real estate in the country.
South Africans are moving away from the instability of the rand and seeking a hedge. Even with Brexit, sterling has settled, and in fact strengthened, as the outcome has already been costed into the currency.
Recent studies have revealed that by 2025 only 40% of Londoners will own their properties. In addition, it has been estimated that only 26% of those aged between 20 and 39 will be on the property ladder by this date. This trend is spreading nationwide in the UK.
So, if you decide to invest in the UK today, you could be a part of the 60%.