October 2012 ~
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Many rst-timers who work in Londonhave decided that the only way to make itto the rst rung o the property ladder isto give up on the city. The south-east oLondon, historically not a popular spot, isgaining traction. Some buyers are movingto less expensive cities in neighboring Kent,Berkshire and Surrey counties, spendingmore time and money on commuting.Middle-class homeowners who plannedto move up to better housing are alsorustrated. Many who were relying on theirhome’s appreciation to help them jump tothe next level nd their equity decimated.There are ew good options or investmentsexpected to yield a generous return to makeup or the slack.
Sights turn to globalopportunities
Many younger Brits have grown tired owaiting. “Even i they can’t aord to buyin the U.K., they’re moving ahead andbuying property elsewhere,” says Pat Tan,CIPS, GRI, o Your Global Agents teamat Coldwell Banker in Sarasota, Florida.“There’s tremendous pent-up demand inthis market, and it’s nding its way toother countries.”Young British investors have decided toinvest in properties they never plan to livein. Tan reports that about one third o hersales to U.K. buyers are now purely orinvestment. They’re searching the globalmarket or rental and investment propertiesthat are aordable, a good value andwill appreciate.“The middle class in the U.K. tends to bequite savvy nancially and internationallywell-traveled,” nds John Mike, CIPS, CRS,GRI, o RE/MAX Prestige Realty in WestPalm Beach, Florida. “They’re not dauntedby the complexities and risks o investingin global real estate.” He reports that in thelast ew years they have been buying inFrance, Spain, the Bahamas, Italy and havebecome a growing presence in the U.S.beyond Florida.
What new U.K. buyers look or
Given their savings situation, these newinternational investors are interested inaordable condominiums, townhousesand in some places single-amily homeswith good yields and expectations oappreciation in the mid-term. Theypreer properties that have depreciatedsignicantly in the economic downturn,yet are in stable markets with low vacancyrates and good yields.Income-producing properties in the U.K.,called buy-to-let, tend to be expensive.They have high carrying costs andmediocre yields that leave little return aterborrowing costs. Yields and prices improveoutside o major metro areas, but vacancyrates rise due to high unemployment. Fora small investor, there’s little prospect oreither moderate income or growth.Certain parts o the U.S. market can givethem both. Mike says he’s seen interestin markets across the U.S. “Chicago,Indianapolis, Denver, Minneapolis—iyou’ve got an aordable investmentproperty that will generate a good return,don’t hesitate to bring it to their attention.”He adds that good property management isa must since the buyer is so ar away.
Some Brits are interested in very specictypes o properties, not ones that willnecessarily appreciate greatly but willprovide a steady stream o reliable income.Mike knows o a middle-class Brit whocame into an inheritance which he wantedto put to work in the U.S. Every six monthsor so he buys a Section 8 property. Theyare inexpensive compared to other rentalinvestments, have low carrying costs, havea government guarantee covering part othe rent, and low vacancy rates due to thelong list o renters waiting or openings.Savvy U.K. buyers with more capital arebuying shopping centers and apartmentbuildings in areas with good prospects or
Reaching U.K. consumers
A Place in the Sun Live
is a U.K.-basedexpo targeting British residents whoare interested in purchasingoverseas properties.
London or Birmingham, U.K.
Held every spring and autumn;next event spring 2013.More inormation at
aplaceinthesun.comOPPLive and The Property InvestorShow
is a U.K.-based conerence andexpo targeting international propertyproessionals who wish to expandtheir network globally.
Held every OctoberMore inormation at
,click on OPPLive in the top navigation bar.The
National Association o EstateAgents
, which has recently mergedwith the
Association o InternationalProperty Proessionals
, is a bilateralpartner o NAR. Find more inormationand nd estate agents at