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Residential

Far East property investors 'look to UK's regions'

Q1 2013

Investors from the Far East are widening their property search from London to other regions and cities in the UK as they look to get maximum returns, according to national property firm Strutt & Parker.

Investors from the Far East are widening their property search from London to other regions and cities in the UK as they look to get maximum returns, according to national property firm Strutt & Parker.

The potential to benefit from strong yields and take advantage of the weak pound are driving them towards overseas property investments and in particular regional UK towns and cities such as Guildford and Canterbury.

James Mackenzie, head of Strutt & Parker's country house department, has revealed that overseas investors are increasingly searching for rural properties to buy in the UK.

While traditional activity from overseas buyers has focused on London properties with buyers perhaps visiting country properties only on a weekend, Mackenzie has identified a slight shift in recent months.

"It would seem that buyers who have invested in London over the past few years have been won over by the country charms and on many occasions are seeing the financial benefit of buying now before prices rise even further in the country market," he explained.

Most overseas property investors have naturally centred their attentions on the regions surrounding London, but a few key sales further afield have shown that the trend of broadening the property search is gaining ground.

"We have just recently completed on a landmark estate down near Exeter that was sold to a South African family - something quite unprecedented for that region.

"I anticipate that these kind of sales will be more prevalent as the year progresses and the market stabilises," Mackenzie added.

Far Eastern investors are also widening their property search because the domestic property markets in major Chinese cities such as Beijing and Shanghai have reached a plateau as a result of oversupply, leading to gross rental yields of just 3%.

Finding residential property for sale in the UK's cities, on the other hand, means they can expect yields of around 8% when they release them on to the thriving private rental market.

The potential growth of sterling in the future is an added attraction for Chinese investors, who are allowed to move US$50,000 (£32,200) out of the country each year.

Mackenzie also states: "We are seeing more of a trend towards parents with children at UK universities putting down roots in the area by investing in the property market. This, coupled with the impressive yields on offer in the UK's regional areas, has made country property an attractive investment."