Driven to look beyond their own borders by a volatile housing market and fluctuating currency, many South African property investors are setting their sights on the UK. So what is it about the UK buy-to-let sector that holds such appeal to investors from South Africa?
“Living in Cape Town has given me plenty of insight into why the UK is such an exciting prospect for South African property investors. There’s definitely a sense of comfort that comes from the similarities between the two countries’ systems, which means that many South African investors are currently looking to grow their wealth securely in the UK.”
Dale Anderson, Managing Director, Fabrik Invest
That sense of comfort and security is one of the UK’s key attractions. Despite Brexit and despite the COVID-19 pandemic, the UK offers a greater sense of political and financial stability and solidity than South Africa does at the moment.
The UK is also home to a healthy property market with strong drivers for future growth. The country has been falling short of its new home construction targets for years. By not keeping pace with its growing population and the trend towards fewer people living in each household, the UK has an entrenched undersupply problem. This is excellent news from an investor’s standpoint.
“In 2019, there were 19.2 million families, an increase of 0.4% on the previous year, with a 6.8% increase over the decade from 2009 to 2019… The number of people living alone has increased by a fifth over the last 20 years.”
Office for National Statistics, Families and Households in the UK: 2019
Another attraction of UK buy-to-let is the substantial yields that investors can enjoy when they choose the right location in which to put their money into property. Liverpool tops the table when it comes to yields, with the Totally Money Buy-to-let Yield Map 2019/20 reporting returns of 10.0% for the city’s central, L1 postcode area. A further two Liverpool postcodes (L11 and L6) fall within the top ten areas, having delivered yields of 8.67% and 8.12% respectively.
The ease with which South Africans can invest in the UK is another draw. Much of the property investment process is carried out online these days, although many investors still prefer to talk through their options in person – hence Fabrik Invest’s Cape Town office.
Managed property solutions that mean no involvement (other than financial) for the buyer add further weight to the UK’s attractions. South African property investors can rest easy, knowing that their investment is being well looked after by a management company that specialises in doing everything from dealing with tenants to undertaking repairs.
Finally, the choice of ways to invest that the UK offers appeals to many South Africans. Investors can choose to transact their business personally or do so through a UK limited company, if that better suits their financial needs.
The Roscoe is a prime example of the kind of UK property that South African investors are seeking. Located in the central L1 postcode district, the development provides contemporary one-bedroom apartments that are ideal for both students and young professionals. Just seven minutes’ walk from the University of Liverpool and Liverpool John Moores University, The Roscoe means students can easily get to class on foot, as well as being able to access the delights of the surrounding Ropewalks creative area and luxurious Georgian Quarter. Apartments at The Roscoe are available from £135,950, with a current offer of up to £5,000 off the asking price (limited time only). A net yield of 6% is guaranteed for two years.
For further details and to progress your property investment plans, contact the Fabrik Invest team by calling +44 20 8175 9891, emailing firstname.lastname@example.org or visiting www.fabrikinvest.com.