British education continues to be a huge attraction for Asian investors.  Whether it be parents looking for a pied-a-terre for when they visit children boarding in the UK or international university students in need of accommodation for their second, third and postgraduate years.

In recent times, we have also seen an increasing number of residential developers varying deposit structures to meet the requirements of international buyers who are keen to ensure their investment and currency strategies dovetail neatly.  The currency movements around Brexit continue to be of huge interest to Asian investors.

The ever-changing UK tax system and the recent 3% SDLT surcharge on “additional properties” has resulted in Asian investors searching for cheaper units and considering multiple or “bulk” deals for which multiple dwellings relief can be applied or, on purchases of 6 or more units, lower commercial rates of SDLT can be obtained.  We also increasingly see parents purchasing in the names of their young adult children who do not yet own any property to take advantage of lower, (sometimes first time buyer), SDLT rates.

Uncertainty around Brexit is encouraging Asian investors to keep a keen eye on affordability.  This means that purchasers are increasingly looking outside prime central London and instead towards zones 3 and 4 (the Docklands, Acton and Brentford for example) and “second tier” cities like Manchester and Birmingham. 

Beyond straightforward affordability, “value-add” is fundamental; location and proximity to infrastructure is key and investors are conscious of the fact that Crossrail, HS2, airports, hospitals and public sector establishments all point towards strong and long-term rental needs.  

Accessing super prime developments at low entry values is also a popular tactic in the current market.  Smaller units (particularly studios) in high spec developments are increasingly the choice for Asian investors seeking to attract young professionals with low rents relative to the facilities on offer (including gyms, swimming pools, concierge and more).

London real estate continues to offer exciting opportunities to Asian investors.  With the ever-increasing issue of under-supply of housing and with increasing volatility in international markets, it is understandable why Asian investors continue to evolve their investment strategies to make the most of what London has to offer in these times of uncertainty.

Article provided by Chris Myers, Partner at Forsters.

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