High Rental Yields Producing Property Profits
Chinese, Malaysian and Far East property investors are buying large swathes of investment properties in the UK as they are being drawn in by strong rental yields and weak economy as the price of Sterling (GBP) is overshadowed by the strong Yen.
This influx of Far Eastern property investors is driving the demand for new build investment properties in the UK’s major regional cities and their appetite for property profit is outpacing demand from Greek, Italian, German and other European property investors who are also keen to snap up property bargains.
The property market in Beijing, Shanghai, Kuala Lumpur, Manila and other leading economic cities in the Far East has become oversaturated in recent years, with the oversupply of available property being responsible for driving rents down with gross rental yields of 3% and below.
Chinese nationals are only allowed to transfer up to $50,000 (USD) out of China every year and many investors see the attraction of the strength of the UK private rental sector, where these overseas property investors benefit from rental yields more like 8%, as well as taking advantage of the weak British Pound (GBP) and holding the properties to maximise the potential future growth of the UK property market.
In Central London property values have begun to cool over the last 12 months with prices only increasing by around 1% and rental yields lower than what can be achieved in other regional cities elsewhere in the UK.
Foreign investors are being driven to seek higher income rental properties in regional cities such as Manchester, Leeds and County Durham because these areas offer fantastic high income opportunities.
Property investors purchasing investment properties in Beijing, can only achieve weak yields, however China is still enjoying 10% annual property price rises, so there is little motive to invest in Greater London just to rely on capital appreciation.
Interest in central London as the best investment destination in the UK has waned a little for the majority of Far Eastern property investors, with many properties being snapped up by European property investors as they attempt to escape the weak Euro.
The higher yields available in the UK’s regional cities are a big draw for the Far Eastern investor, in particular they are interested in new developments targeted at young professional tenants. Many of these Eastern investors have children studying at British universities and are keen to put down roots in the country as well as profit from their property assets, utilising the strong tenant demand to get maximum returns from their investments.
Find out more about property investing in the UK and Overseas here
The Chinese and other nations in the Far East have stronger economies than we do here in the UK, and yet they are attracted to our shores to make a profit. In fact the Bank of China is offering sterling mortgages to Chinese property investors, at around 60-70% Loan To Value rates (LTV) and they are making great use of them, UK mortgage lenders and Banks take note!
Do overseas property investors know something that the majority of the British public don’t yet realise?
Only savvy property investors are the ones taking action and where they originate from is of no relevance or importance. They just all share the same belief – There is Profit in Property!
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