The question on many people’s lips at the moment is to what extent the overseas property markets offer better opportunities than the UK buy-to-let market for property investors. Is the continued growth in demand for rented accommodation in the UK a positive long-term omen or will population trends reduce the yields on UK rented property?
Britain is getting more crowded by the year, we are doing nothing to slow the trend and, by the way, roughly 70% of the predicted growth in our numbers is estimated to be attributable – directly or indirectly – to immigration. Much of this immigration has been illegal until fairly recently and, in the main, economically driven – people from poorer economies seeking a means of improving their incomes by working in Britain. Frequently migrants of this nature only provide rental incomes at the lower end of the scale as their primary focus is on keeping as much of their income as possible or even remitting it back to their homelands. It is not uncommon to find them sharing accommodation to keep costs down.
Whilst finding housing for all these new occupants of our already crowded island presents challenges enough there is also the question of how employment statistics can be expected to move during the coming decade or two, how our health and education systems will cope not to mention what the M25 will be looking like 10-15 years from now.
It is no surprise to me that many of our clients at this time are what we call “ABH” clients – anywhere but here! Look at some of the statistics – food prices, and fuel inflation have never been so bad (yes, Mr Darling, we know!):
It is difficult in this environment to imagine that yields on rented UK property will hold up anything like as well as good quality rental property in, say, the South of France, The Caribbean or even some central European cities such as Berlin or Prague. I certainly feel these markets represent a better long-term bet than the UK.
Check out some of France’s long-established and highly successful Leaseback property or some tenanted accommodation in Berlin. For those seeking a guaranteed and much larger return with innovative financing arrangements these Caribbean properties offer an interesting alternative.