International Investment in the UK market

International interest in the UK is as high as ever and Foundation Recruitment has noticed! Investment in property on these shores has sent shockwaves through the market. There have been increasing headlines in the recent press of property prices being inflated due to the overseas interest. House prices in London have risen by circa 30% in the last 5 years- although this is nothing in comparison to the soaring costs in Hong Kong where prices have risen by 250% since 2005.

There is huge interest from foreign investors and 70% of office and retail property that sold in London 2012 were to foreign buyers.

The most common target for investors is office and residential property; however, this is quickly being caught up by “distribution property”.  Thanks to the booming online shopping market there is growing demand for warehouses and logistic hubs.

Due to the banking crash and abrupt nature that banks stopped lending in the UK overseas investors now make up 33% of all residential purchases in London a figure that increases to 75% in prime London locations. This is a trend that is only going to be stopped by a government intervention, something that many are calling for; not less the RICS.

This huge surge of investment in what is perceived as a ‘safe haven’ in London has not spread into the wider UK market until recently. One foreign hedge fund is planning to invest hundreds of millions of pounds in commercial property throughout the regional market in cities such as Manchester, Leeds, Liverpool and Sheffield cities that they see as being heavily undervalued after commercial values dropped by circa 40% in 2008. The opportunity is clearly there to see.

There are now speculative developments on-going through the regions notably St Peters Square in Manchester, the second stage of Spinningfields in Manchester and Wellington Place in Leeds. Manchester is the only regional city in the UK in the process of building over 200,000 sq.ft of speculative space. These schemes are all made possible thanks to the faith and investment we are experiencing from our overseas allies.

As specialist property recruitment consultants Foundation Recruitment prides itself on staying close to the market, understanding key current trends and activity. This enables us to be market leaders in property recruitment. As we head to the end of the year, we are increasingly encouraged by the number of new roles being placed with us across the general practice spectrum. After 4+ years of prevailing negativity, could it be that we are finally to see a positive medium-term outlook for the UK property market?