Resilient UK Real Estate Market Continues to Entice GCC Investors Amid Currency Fluctuations

Despite the UK pound’s ongoing recovery from a period of devaluation, the allure of UK real estate for investors from the Gulf Cooperation Council (GCC) remains undeterred, with potential profits still evident, according to Amit Seth, Managing Director of Qima Real Estate. The company, a specialist in selling UK properties to GCC investors, stands poised to exploit these opportunities, which are augmented by the ongoing strength of the pound.

Last year, amidst the tumultuous tenure of Prime Minister Liz Truss, the pound suffered a significant dip in value, rendering UK properties more financially accessible to investors from regions with dollar-pegged currencies such as the GCC. Though the pound has since begun a steady recuperation process, this ‘discount’ on UK real estate has not entirely disappeared.

“During the period of the pound’s most pronounced dip, in September 2022, GCC investors were availing approximately 21% savings on their investments,” Seth stated. “At present, the savings potential hovers around 10%, as determined by the current currency exchange rates.”

The enduring appeal of the UK real estate sector lies not merely in the still-affordable pound but also in the country’s stable political climate, diverse economy, and globally-renowned education institutions. Hubs of technological innovation, such as London’s Silicon Roundabout and Cambridge, make the UK an attractive destination for investment.

Moreover, despite the UK still being in recovery mode post-pandemic, investments levels have seen an upward curve, mirroring the general trend across Europe, particularly in countries such as Germany and France. These nations, together with the UK, remain the prime recipients of foreign direct investment (FDI).

Seth provided an encouraging overview of the UK rental market as well: “Rents in the UK escalated by an average of 6% in 2022 and are projected to continue their ascent at rates of 5% in 2023 and 4% in 2024.” He further detailed, “Currently, the average rental yield in the North is approximately 7.4%, whilst that in the South is about 5.2%.”

The advantageous conditions presented by the UK property market are not lost on the GCC, which shares a vibrant trading relationship with the UK, accounting for £45 billion ($55.55 billion) annually. Investors from the region appreciate the consistently good returns from the UK real-estate market. Indeed, GCC’s sovereign wealth funds have over $2 trillion parked in the UK, primarily in the real estate sector, a figure set to swell even further.

Qima Real Estate, with its strategic presence in Dubai and London, is poised to exploit this GCC-UK synergy, all while the UK property market continues to attract investors, undeterred by the recovering pound. As the GCC’s penchant for UK real estate continues to manifest robustly, the resilience of the UK property market becomes increasingly evident, painting a hopeful picture for its post-pandemic recovery.

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