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BUYING IN BRITAIN

From the golden postcodes of London’s Mayfair to urban chic in the cities of the north, the UK remains hot property with Middle East investors – Cityscape finds out why.

September 2015

The UK market has long held an attraction with Middle East property investors. From the status-rich postcodes of London’s Mayfair and Knightsbridge, to the steady increase in buy-to-let property in the cities of the north, there are plenty of opportunities to be had, depending on your budget and your plans on how to use the property.

WHERE TO INVEST

For many Middle East investors the prestige of a London address is still a powerful motive when considering investing in the UK and many brokers still recommend the capital as an ideal investment base.

“If you are looking for a safe haven investment then I would still look no further than the traditional prime central London hotspots of the Royal Borough of Kensington and Chelsea, and Westminster. Capital growth and rental yields may prove to be rather conservative in these locations but their values have proven to be extremely resilient to both domestic and global economic issues,” recommended Jonathan Mount, Partner at The Buying Solution (the independent buying consultancy of Knight Frank) who travels to the Middle East regularly.

“If you are looking for slightly more exciting capital appreciation then looking further afield to areas going through significant regeneration is going to be the route to take. Many areas in East London, for example Canary Wharf, Tower Hamlets and Hoxton have experienced excellent short-term growth and the projections over the next five years are equally strong,” he added.

However, Camilla Dell, Managing Partner of independent property buying agency, Black Brick, thinks London is heading for a fall: “Traditionally, a lot of our Middle Eastern clients have tended to buy in the ‘golden’ postcodes of Knightsbridge, Belgravia and Mayfair. We believe these locations are due a price correction in the next 6 to 12 months, so for investors in the current market we tend to advise looking further afield in order to maximise both the rental yield and capital growth prospects.”

Philip Churchill, Co-Founder & Managing Partner of 90 North, a company offering sharia-compliant property investment, believes regional cities hold the key. “If you want to buy and hold for the grandkids then London is great but if you’re looking for a bit more then you have to look outside London. There is plenty out there in strong regional cities,” he said.

90 North co-invests in all its property deals, and offers sharia-compliant financing and ensures that tenant use is also sharia-compliant.

Ray Withers, Chief Executive of property investment specialists Property Frontiers, reckons some of the best opportunities can be found within the London commuter belt – cities within an hour of London and with good transport connections. “Obvious choices are Oxford, Reading and Cambridge. Cities like this should see above market capital growth and yields of around 4% can be expected,” he said.

“Buying in one of the UK’s other major cities is also a good idea right now; Manchester, Liverpool, Birmingham and Bristol all have dynamic local economies and an undersupply in housing. Prices in these areas are generally much cheaper than in the south east and yields of more than 6% can be achieved,” he added.

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