There are various factors which are set to make an impact on Middle Eastern investors this year, both in the UK mortgage market and political events across the globe.
As such, we anticipate a shift in terms of how savvy investors will approach their investments in 2018.
Shift towards European property investment
As investors diversify their portfolios to spread the risk at uncertain times, we’re seeing a shift towards investment for lifestyle purposes, and second homes. Therefore, we’re working with more and more clients from the Gulf Corporation Council (GCC) who wish to purchase property in Europe. There are some locations which offer excellent potential, and many of our clients are choosing to release equity from their high value London asset, in order to invest in such places.
For example, Berlin is an emerging market in terms of real estate investment, while places like St Tropez and Marbella are retaining their investment value, so we anticipate activity in these markets in the coming months.
Investment in locations outside of London and diversifying assets
London has long been the first choice for real estate investment thanks to its huge capital growth and rental yield opportunities. However, as the London market has stagnated in recent years, we’ve seen a real trend in clients purchasing and refinancing in UK locations outside of London.
For example, we recently assisted a client who was looking to finance £1.4million worth of student accommodation in Southampton on the south coast, and another who was refinancing a £5million portfolio spread across both Derby and London.
There are some relatively unknown areas, and we’re confident savvy investors will see their potential and demand for these locations will grow.
Refinancing existing assets
A further trend we’re seeing is the desire to refinance, rather than purchase new assets, particularly in the UK. Indeed, we are currently working on over £12million worth of refinance for our Middle Eastern clients. As house prices are flat and finance is cheap, it makes a lot more sense for people to hold on to their high value asset and refinance onto a cheaper rate.
As mentioned above, we’re also seeing a lot of Middle Eastern investors refinancing to release capital for onward investment – which is in line with what we’re seeing in terms of investment in European locations.