South African Property Investment in the UK - 21/10/23

Political and economic instability in South Africa has caused individuals to search for the best ways to protect both their investments and assets. Whilst the South African property market is rife with extreme volatility, many overseas investors may find an opportunity investing in UK property as it presents a chance to diversify your portfolio, secure stable returns and utilise discretionary allowance for substantial gain.

Purchasing property within the UK is respected as one of the most stable and profitable investments to have. The UK property market is currently valued at £9.5 trillion, with a rise of £650billion happening in 2021 alone. This valuation is four times more than the total of the UK economy- and has a history of stable growth, with any dips quickly being rectified within a short period of time.

This significant market growth across the country has meant rents have also increased, with prices across the UK haven rose 4% in Q1 2022. The desirability to rent is driven by an increasing number of people wanting access to the best employment opportunities, entertainment options and city centre lifestyle these cities have to offer, without the responsibility of full property ownership.

“The average house price in England increased by 10.7% over the year to December 2021. This is up from an increase of 10.5% in the year to November 2021, with the average house price in England now at a record level of £293,000.”

Younger people are also shifting their attitudes away from homeownership. Whilst previous generations rushed to get on the property ladder, young professionals now place little value on owning a home of their own, opting instead for the flexibility and high-quality accommodation renting has to offer.

These reasons have contributed towards the desirability for good quality accommodation and nationwide supply and demand imbalance, it is easy to see why the UK property market continually presents itself as a valuable investment opportunity. Both domestically and internationally, UK property is widely considered as a stable investment due to the steady market growth, potential for high rental yields and the nationwide demand for housing.

The UK also provides one of the most stable governing bodies in the world. Investing in the UK market guarantees protection from oppressive or negative legislation that will affect right of ownership. Purchases in UK property with full title deeds are protected by the state and cannot be forcibly removed from the owner or handed over to the state unjustly.

When combined with continued growth and no signs of slowing down, the UK property market is incredibly stable in comparison to the South African market. The average house price in the UK increases by 9.4% over the year to January 2022, whilst the African house price averaged to 4.2% during the same time. This equates to the UK doubling the growth rate of its South African counterpart.

Finally, on-going projects and infrastructure investments are happening nationwide, including the development of HS2, a brand-new High-Speed Rail Network. The completion of this network will provide high-speed travel between the north and south in record time with time reductions of up to 50%. Upon completion, the network is also expected to create 96,000 new jobs as a direct result of the route and double the economic output of Manchester to £132bn.

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