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UK property investment for South Africans

by Andrew Rissik | Jan 13, 2016
  • The UK is as popular an investment destination for South Africans as ever. If you are considering making a large offshore investment any time soon, you should think about investing in UK property. Not only is it a great way to earn solid returns in Pounds, but it will also help protect you from Rand depreciation
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    The English connection

    South Africa and England have a shared history that goes back hundreds of years. In more recent times, the economic ties between the two countries have become increasingly entrenched (even in the face of occasional diplomatic frostiness). As South African citizens seek to invest abroad to ameliorate Rand volatility, this relationship has strengthened.

    The UK has also been a popular investment destination for South Africans who may wish to emigrate there in the future. Investing in a country to which you intend to move one day will make it easier to get your life started in your new home. Securing a mortgage or paying for school fees will be a lot easier if you are already deriving a UK-based income.

    Protect yourself from a declining Rand

    Globally, South Africans have the second highest proportion of their assets offshore; there is little wonder as to why this is the case: Since 2011, the Rand has devalued by more than 100% and, unfortunately, there are no signs of improvement in the medium term. 

    The UK remains the number one offshore investment destination for South Africans. With current Rand volatility, moving a portion of your investment capital into more stable markets, like the UK property market could be a prudent move.

    The UK property market

    The UK is experiencing a long period of sustainable growth in both size and value. The property market in the UK is also diverse and relatively liquid. Currently, there are an increasing number of people looking to rent in the UK. Investing in UK property will more than likely yield some solid returns over the next few years for investors.

    In contrast, the South African property market, due to Rand depreciation, has lost around 30% of its value in hard currency terms. Thus, if you’re thinking of getting into property, you may want to consider looking beyond South Africa.

    There is more to the UK than London

    Most analysts agree that the London property market is fully priced right now. So, if you want to invest in property, don’t forget to look outside London. In particular, keep an eye on places that will benefit from government-backed economic investments, like those described in George Osborne’s “Northern Powerhouse” plan.

    These cities could be sites of major growth, which could mean better than usual returns for investors who get in early enough.

    UK property specialists: Select Property Group

    Select Property Group (SPG) uses Sable International as a strategic partner in South Africa. SPG specialises in a variety of UK property solutions and has experience helping South Africans invest in UK real estate. Giles Beswick, SPG’s Director, had this to say about

    South Africans and the UK property market: 

    “The British Pound has long been established as a hedge against fluctuating currencies – and the Rand is becoming increasingly volatile.

    Against a new backdrop that includes the fallout from the recent Fed interest rate rise, high-yielding property assets in the UK are looking increasingly attractive to South African investors. The UK’s highly developed and extensive product portfolio, from student property to real estate in an ever-expanding private rented sector, has helped cement Britain as South Africa’s largest booking centre for international property investment.

    Our UK investments have enabled many South Africans to generate annual ROI of 7% from rental yields alone.”


    If you’re thinking of investing in the UK property market, email my assistant Kimberley Wain and she’ll schedule a time when we can chat about your options.

    We are a professional services company that specialises in cross-border financial and immigration advice and solutions.

    Our teams in the UK, South Africa and Australia can ensure that when you decide to move overseas, invest offshore or expand your business internationally, you’ll do so with the backing of experienced local experts.

     
     

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    Sable International is a trading name of 1st Contact Money Limited (company number 07070528), registered in England and Wales. We are authorised and regulated by the Financial Conduct Authority in the UK (FCA no. 517570), the Financial Services Conduct Authority in South Africa (1st Contact Money [PTY] Ltd - FSP no. 41900) and hold an Australian Financial Services License issued by ASIC to deal in foreign exchange (1st Contact Group - AFS License number 335 126).

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