UAE investors lock in long-term value in London real estate

The UK’s education system, business considerations and long-term capital preservation are the important factors that make London a top property investment destination by many Middle Eastern high-net-worth individuals (HNWIs). For first time purchasers looking to enter the market, enquiries for new-build developments are concentrated below the £2 million (Dh9.52 million) or above the £5 million mark, according Core’s Prime Central London Snapshot 2019.

“As these properties are predominately acquired for clients and their families to be used when they visit London, top of the line amenities and service/concierge offerings associated with these new developments continue to be a key draw,” the report said.

The report further noted that Prime Central London (PCL) continues to be attractive to property investors strong, despite the ongoing socioeconomic impact of Brexit. “Traditional UAE investors, with established residential portfolios in London are increasingly looking to take advantage of the ongoing market conditions, acquiring upgraded or larger units in PCL, which are now perceived to be fairly priced.”

Capital preservation and PCL’s inherent appeal is deeply understood by the UAE and wider Middle East-based investors/end users who have historically shown a keen interest in properties within the PCL districts – education, business and secondary homes being the primary demand drivers for this demographic, the report stated.

“With attractive exchange rates and uncertainty surrounding Brexit, interesting opportunities are being created for dollar-pegged economies in the region,” said Alex Casaki, head of London desk at Core. “Currency advantage has now resulted in savings of nearly 25 per cent, further compounded by softened sales prices (an average of 15 per cent), making property purchase in PCL over 40 per cent lower than June 2014 peak values for buyers trading in dollars. This represents long-term capital preservation opportunities for UAE-based investors.”

The report also identified five emerging hotspots to look out for in 2020:

1. Bracknell – A tech hub that offers its own thriving business community, alongside fast, direct connections to London and other key destinations, but with a much lower price tag. Property price growth since 2014 has been 20.77 per cent.

2. Slough – With average house prices currently at around £345,000, Slough is around £200,000 less than neighbouring Windsor and circa half the price of London. Property price growth since 2014: 18.14 per cent.

3. Stevenage – The first new town in the UK, Stevenage still sits at the lower end of the price scale for commuter locations, with average sold prices of around £293,000. Property price growth since 2014: 20.77 per cent.

4. Northampton – Sat almost equidistant between Birmingham and London, Northampton’s location offers commuters the best of both worlds with an affordable price tag. Property price growth since 2014: 23.8 per cent.

5. Milton Keynes – It is listed as one of the top 10 locations for house price growth according to recent Hometrack reports. Property price growth since 2014: 21.12 per cent.