As house prices in London continue to drop and UK consumer confidence remains subdued, greater opportunities to invest in the UK property market for a foreign investor emerge. According to Nationwide, the world’s largest building society and one of the UK’s largest mortgage providers the UK house price growth remained broadly stable in March at 2.1%, a slight change from the 2.2% recorded in February and house prices fell by 0.2%.

Nationwide also explain that the relatively subdued pace of house price growth appears at odds with recent healthy rates of employment growth, a modest pick-up in wage growth and historically low borrowing costs.

This indicates that from a broader perspective macro and micro economic factors point to steady growth, which translates into long term investor confidence as the economic path of the UK remains positive. Therefore, when property prices decrease during a cyclical economic trend opportunity to obtain great investment value at a more affordable price is created.

Property is a long term investment, and has the ability to defy short term fluctuations, so when opportunities like the current term are presented to the market it is important for the foreign investor to pounce. Value of real estate has to be calculated over a long term economic growth cycle.

Taking this into account the UK property market, especially London, presents fantastic returns, especially at the current rate.

External elements have played to the decrease in house price growth over the past few years, and although the Southern English regions are experiencing its slowest pace since 2012, it was inevitable that the intense growth cycle was going to fluctuate. Investors should not see slowing house price growth as an indicator of reduced investment value but rather as an opportunity to get a foot into the door of the UK property market.

Bram Davies
Sigma Property Hunt
Managing Director