GCC investors could bet on the UK property market to hedge their future

The UK property market, renowned for its stability and growth potential, has become a focal point for international investors seeking exciting opportunities.

In this context, Berkeley Group focuses on its long-term goals within the Gulf Cooperation Council region, aiming to facilitate investors’ entry into the UK property market. The group’s strategic vision includes nurturing sustainable communities that align with the evolving preferences of GCC investors.

The GCC market has recently experienced a remarkable surge in purchase inquiries in the UK. Notably, Marc von Grundherr, director of Benham and Reeves, highlights this upward trajectory in demand, particularly in the prime market segment valued at over £3 million ($3.72 million).

This surge in interest aligns with the overall market trend and showcases the resilience of the UK property market in captivating GCC investors.

Will McKintosh, senior director and head of residential & investment at JLL in the Middle East and North Africa, notes the common belief among investors that purchasing off-plan holds strategic advantages.

By purchasing off-plan, investors anticipate potential currency gains and expect interest rates to have corrected by a handover, making financing more favorable. These factors make UK property investments even more appealing to GCC investors.

The allure of UK property is multifaceted, with the prospect of long-term value appreciation and attractive financing opportunities standing out.

With the British pound recently hitting its lowest level against the US dollar in nearly 40 years, the relative weakness of the pound sterling against other major currencies, including the AED, further enhances the appeal of UK property investments.

This currency advantage empowers foreign investors to maximize their investments and potentially amplify returns. The opportunity presented by the pound’s current position is not lost on investors, and the GCC buyers are well-poised to capitalize on these favorable market conditions.

In 2022, Saudi Arabia and the UAE secured positions in the top 10 countries outside the EU for international students studying in the UK. This educational connection underlines a robust bilateral relationship and augments the appeal of UK property investments for GCC investors.

Middle Eastern investors are also projected to inject US$3.2 billion into the UK real estate market in 2024. This influx of capital is driven by the market’s increasing affordability and a growing interest in the student accommodation sector.

As GCC investors diversify their portfolios, the UK’s real estate market emerges as an attractive avenue for long-term gains and financial stability.

• Adam Demetriou is Director at Berkeley MEA & India.