A study indicates that the UK real estate market is projected to attract Dh11.7 billion in investments this year, with a significant portion anticipated to originate from the GCC.
Select Property, a prominent UK-based property developer and investment partner, reports that investors from Saudi Arabia are increasingly focusing on capital appreciation to generate rental income and diversify their investment portfolios. Adam Price, CEO of Select Property, notes that despite global uncertainties, the visa waiver for GCC nationals visiting the UK is facilitating property viewings, real estate transactions, and mortgages for Middle Eastern investors.
Recent survey results from the firm reveal that 73% of Saudi investors have contemplated investing in UK property, with 75% interested in Birmingham or Manchester, and 65% viewing real estate as their preferred investment strategy. For example, the West Midlands economy, which includes Birmingham, is expected to grow by Dh46 billion over the next five years, driven by major regeneration projects like the HS2 high-speed rail project.
Price elaborates, "GCC investors attracted to UK real estate often aim to capitalize on rental income, the city’s renowned economic opportunities, or both. HS2 is enhancing the city’s connectivity and boosting its status as a commercial hub, thereby increasing property values and making high-quality educational facilities, job prospects, and affordable housing more accessible."
The number of GCC students in the UK is set to rise, with over 8,000 UAE students currently studying there, nearly double the number from five years ago. Select Property has also noticed an increase in inquiries from Saudi investors interested in educational opportunities in Birmingham, one of the top cities for student investors due to its reputation as the largest center of higher education in the UK.
Furthermore, the surge in GCC investment interest in the UK is intensified by reduced interest rates and lower property prices in certain market segments. Market data from BLME shows that 87% of GCC interviewees cite falling interest rates as a significant factor influencing their investment decisions in 2024. Branded residences have particularly attracted KSA investors, who prefer high-quality, well-managed properties that offer prestige and reliable returns.
With 69% of Saudi households aiming to own a branded property, and these residences often located in prime areas with top-tier amenities, many are turning to the UK for secondary investment opportunities. Price concludes, "Supply shortages are making the UK’s real estate sector an attractive option for investors seeking stable returns and long-term growth. Rental yields ranging from 6.6% to 8% in cities like Birmingham highlight its potential for strong ROI. Savvy investors who enter the market now, particularly while interest rates are low and new developments are emerging, will be well-positioned to capitalize on an ideal scenario for buy-to-let investments."
