Now is the best time to invest offshore
“Perhaps the best time to buy was five years ago, two years ago or even last year,” says Bathurst, “but the next best time is right now. In the last two years, some UK cities have seen a 20% increase in property prices, not including the attractive yields giving owners up to 7% net, in hard currency.
Judge the investment, don’t wait for perfect external factors
“Most people know that going offshore is a good idea, the question they ask is whether now is a good time to take the plunge? Should we wait for the SA elections, the SA investment downgrades, the SA economy to recover, the rand to get stronger, Brexit or COVID. “Investors should focus on the fundamentals of the investment involved,” she says. “UK residential property is the best performing asset class over last 30 years, historically outperforming bonds, gilts and stocks. Buying in large cities, like London, Manchester, and Birmingham are the most stable, and will see growth over the long term. These are also markets where we can get mortgages for our clients, meaning that for as little as R700,000 you can own a prime city luxury apartment and have their professional tenants paying the bond, resulting in a monthly cash flow in GBP, as well as year-on-year growth,” says Bathurst.
Demand outstrips supply in UK housing market
Bathurst says, “You can’t argue with the fundamentals of supply and demand. The UK has a massive housing shortage and needs to plug a 300 000-home gap. Over the long term, any well-located property will increase in value,” she says.
Inflation means local house prices are not increasing in real terms
“At home, house prices have risen by 57% between 2007 and 201, which sounds great. However, when that figure is adjusted for inflation, real prices actually fell by 18%. Many investors suffer from ‘inflation illusion’ and don’t notice how destructive inflation can be over time, so they think their money is better held in the local banks or in SA investments. Yet, if inflation continues as it is, essentials like medical care, school fees and food will cost double in 10 years’ time. Research shows that cash in a bank may feel secure but has a cost. Over the long term and in real terms bank savings yield around 1%, meaning many investors will not retire with enough money,” she says.
UK residential prices up from a year ago, despite Brexit and COVID
Bathurst says, “There is a misconception that UK house prices are going to plummet because of Brexit, or COVID-19. When, in fact, during Brexit UK house prices in some cities rose by 16% in a year. A recent article quotes the UK House Price Index by Zoopla – the UK’s leading property resource – stating that six weeks since the market reopened, sales were 4% higher than pre-COVID-19 levels. The high demand for houses in the UK, with the low available supply of homes for sale, 15% lower than a year ago, will keep driving house prices up. As an example, the asking price for homes sold in June are up 7%, year-on-year. There has been a 2.4% increase in house prices nationally in the UK over the last 3 months, with some cities, like Manchester and Liverpool seeing 3.9% growth – and this during the COVID peak.
Independent property specialist work for you, and not the developer
“Hurst & Wills’ success is that we are independent and not tied to any one developer, this means that we work for you, our client. We only deal with developers who have a long, successful track record and we judge each development on its own merits. We also regularly check each development to ensure building and letting is on track.
Well-located Birmingham apartments for only R700 000
“One of the latest developments we are showing clients is Parkgate, located close to Birmingham city centre. This stunning refurbishment sits against the beautiful Sheldon park, with 62,000 employees working within a 5-minute radius – young professionals who need apartments. The new HS2 high-speed train provides quick access to the airport and gets to London in 38 minutes, making this area an easy commuter location for the capital, which will inevitably drive up property prices,” she says. “Prices in this area have saw a 16% increase year,” she says. We can secure mortgages on this development, meaning a SA buyer would need only R700k to a unit, available from £127,000 with an expected 6% rental yield.”
List price going up this week + 6% rental yield
“Prices in this area have saw a 16% increase year,” she says. “The list price for the remaining units in this popular development are going up by 4% this week, so anyone looking to purchase now, would sit on equity as soon as they buy,” she says. “As it’s just completing, immediate rental income would be available. We can also secure mortgages on this, meaning a SA buyer would need only R700k to purchase this property. Units are available from £127,000 with an expected 6% rental yield,” she says.
Now is the ‘perfect’ time to invest
The best advice I ever received was: ‘The only way to make money from property is to buy a property’,” she says. “What are you waiting for?”