With many years of experience within the foreign property market, Michael Johns discusses why UK property investment is a better market to invest in. He reflects on previous market activity and talks about the UK market stability.
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Please see below the full transcript of the video:
Hi and welcome to the latest Ask Johnsy where we’re going to look at why invest in the UK? Well, I’ve been around quite a lot, I’ve sold in over 30 different countries but why have I now come back to selling in the UK and focusing on the UK?
Well, there’s a number of reasons for that and let’s look back at what attracted people at first. In the 1980s, people saw what was happening with Spanish villas and were buying Spanish villas and reselling them for a huge profit and people got the ‘holiday home bug’, and then in the early ‘noughties’, we had areas such as Bulgaria and Romania and the emerging markets where you could buy houses for next to nothing and rent them out. But did people really make a lot of money, was that growth sustainable? The answer in a lot of cases is no. People have gained something out of it because maybe they’ve had somewhere to use as a holiday home while they’re getting a steady income. But not many markets really can compete with the returns and the stability that you get from the UK market.
We heard a lot of success stories but we also heard a lot of failings, legal systems that had crashed, people that had been left without their life savings they’d put into properties and properties were built without planning permission and understanding all of those different markets. It’s very difficult and even some of the experts get it wrong as well, you know we saw that with some of the big legal companies had got it wrong with overseas investments.
With the UK, it’s a very level playing field the UK, it’s heavily regulated with few surprises really. The UK’s legal systems, the conveyancing process, and the registration of properties title all very, very straightforward. People like this, they’re also attracted to the UK because it’s a very stable economy. It’s politically stable and politically secure. This stability is also recognised by financial institutions who will provide lending on most properties in the UK will also design finance packages that are different for people in different circumstances. So, you have overseas mortgages, you have low-money down mortgages, you have help-to-buys for residential buyers so that stability is recognised by financial institutions as well.
We’re only a small island, so there’s not a lot of land so there’s an ever-increasing demand and supply is always tested and we were always told that there’s a housing crisis, there’s not enough houses and that’s been for a number of years now and that will continue, the population continues to increase and the supply has dwindled quite quickly. Also, there’s a very healthy owner-occupier market in the UK, which is always attracted, and it will also provide additional exit strategies for the investor.
Although the UK’s very small you really have to focus on micro-markets, not just the macro-market not just the UK, but within the UK, within the city, within a postcode even, from road-to-road it can change dramatically what you can get out of property and what you can expect in terms of growth and returns. So, it’s very important to know the specific areas so if you are investing in the UK, I would urge you to speak to us at Residential Estates where we have a good understanding of those micro-markets to really focus on; those areas within cities where you can make the most money, those areas that we’re expecting to boom where the growth levers are. So, feel free to call us for advice at any time and thank you for watching Ask Johnsy.
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