Although foreign investment has always been a hot topic to discuss, it seems like Brexit sparked the interest even more. Whilst some were convinced that the amount of investment and overall trust in the UK market will decrease drastically, we at Moving City have seen quite the opposite.
At the moment the global real estate investment sees the highest level setting a record with a total of USD 1.62tn compared to USD 1.43tn in 2016. A major driving force behind these record levels is Asian investors, as pointed out by The Global Investment Atlas 2018. This growing interest motivated London’s real estate market to maintain a sufficient supply. Hence, the number of London skyscrapers has exceeded 500 for the first time, according to NLA Research Paper April 2018.
Furthermore, whilst Chinese investors experienced severe damage few months after Beijing stopped investing outside their domestic markets, their investment in UK property market has reached record highs. Similar investment behaviour can be seen from the Middle East region where, due to ongoing political issues, the investments suffered a downfall and have decreased since 2012. The investors are currently preferring the UK over their local market. Of course, the weaker pound multiplies the attractiveness even further making the skyscrapers in London cheaper for overseas investors.
One can argue that the foreign investment is creating new jobs whilst generating green, low-carbon growth. Thus, contributing to the economic prosperity and stability in the UK. However, it also adds fuel to already bright flame of competition in the real estate market. This can go two ways, whether it ignites further development of properties across the country or make the competitiveness in real estate market unhealthy. We believe that this time there is a golden middle way – healthy competition and further growth of high standard developments across the UK’s capital. Hence, if we retain current pace, Sadiq Khan, Mayor of London could reach the goal of building 66,000 properties per annum.
Overall, not only foreign investors are benefiting from investment in the UK, but also the local economy and citizens. Furthermore, when it comes to the uncertainty waves created by Brexit, we strongly believe that the investors can surf them successfully.
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