Falling interest rates are driving some 87% of GCC investors to the UK real estate landscape, said Select Property, a leading UK-based property developer and investment partner.

The surge in GCC investment interest in the UK is amplified due to a reduction in interest rates and lower property prices in certain market segments. Market data from BLME shows a notable 87% of GCC interviewees citing falling interest rates as a key influence in their investment decisions in 2024.

According to Adam Price, CEO of Select Property, despite global uncertainties, the most evident trends show that investors from Saudi Arabia are increasingly pursuing capital appreciation to generate rental income and diversify their investment portfolios.

Earlier this year, a visa waiver for GCC nationals to visit the UK was implemented. This policy reform is making property viewings, real estate transactions, and mortgages more accessible for Middle Eastern investors in the UK.

Several factors

These findings align with survey results released by the firm last month, which showed that 73% of KSA investors have considered investing in UK property, 75% are eyeing Birmingham or Manchester, and 65% view real estate as their preferred investment strategy. The synergy between GCC investors and the UK real estate market is apparent as market analysis estimates a staggering AED11.7 billion ($3.19 billion) influx of investment in 2024 and several factors are contributing to this forecast.

For instance, the West Midlands economy, which houses several boroughs including Birmingham, is anticipated to see its economy expand by AED46 billion over the next five years. Major regeneration projects like the HS2 high-speel rail project are playing a starring role.

Price explained: “GCC investors who lock eyes with the allure of UK real estate are often keen to capitalise on rental income, the city’s well-known economic opportunities, or both. HS2 is improving the city’s connectivity and elevating its stature as a commercial hub to boost its property values while making great educational facilities, job prospects, and affordable housing accessible to benefit homeowners and investors alike.”

The number of GCC students in the UK is poised to continue rising as over 8,000 UAE students currently study in the UK, nearly double the number from five years ago. Select Property has similarly seen an uptick in inquiries for their services from KSA investors pursuing educational opportunities in Birmingham, one of the top cities for student investors given its reputation as the largest centre of higher education in the UK.

Branded residences

Branded residences have particularly been a focus for KSA investors, driven by their preference for high-quality, well-managed properties that offer prestige and reliable returns. With 69% of Saudi households aiming to own a branded property, and this type of residence being accompanied by top-tier amenities in prime locations, many have looked to the UK to realise this vision via secondary investment.

Price added: “Supply shortages are positioning the UK’s real estate sector as an attractive option for discerning investors seeking stable returns and long-term growth. Rental yields ranging from 6.6% to 8% make cities like Birmingham demonstrate its potential for strong ROI. Savvy investors who enter the market now, especially while interest rates drop and new developments rise, will be well-positioned to capitalise on an ideal scenario for buy-to-let investments. Based on our recent interactions, KSA investors are keen on expanding their investment wallet and we are witnessing this in increasing numbers lately, especially in the branded residences segment.”

Since 2004, Select Property has been developing world-class branded residences in some of the UK’s most desirable cities, including Manchester and Birmingham. While Saudi citizens have long regarded the UK as a desirable market for secondary investment, Select Property has observed an uptick in interest recently; specifically, as it relates to investment in luxury-branded residences. Their renowned brands, such as Affinity Living, The Prestige Collection, and One Port Street have been well-received by global clients. The company’s continued efforts are simultaneously assisting GCC investors and solidifying the UK’s stature as a cross-border investment hub on the heels of the strong price changes experienced last year and ongoing adjustments.-

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