Latest Report - UK Property Investors Moving Towards the UK’s Regional Cities

According to Handelsbanken's latest Property Investor Report, the East of England has emerged as the prime region for property investment over the next 12 months, making it an area of significant interest for overseas UK property investors.

The report, which surveyed UK property investors with an average portfolio size of 35 properties, revealed that 26.5% of respondents identified the East of England as the most appealing region for investment. This region is closely followed by the North East & Cumbria (24.5%), the North West (22%), and the South East (21.5%). Investors appear to be targeting areas with higher yield potential rather than those with historically strong demand.

Notably, London, which was the top investment hotspot last year, has dropped to fifth place with 21%, sharing the spot with the East Midlands. The South East also saw a decline in attractiveness, scoring 21.5% compared to last year’s 26%.

The report indicates strong growth intentions among investors, with nearly two-thirds (62.5%) planning to expand their portfolios in the coming year. Additionally, 27.5% aim to maintain their current portfolio size, and only 8.5% intend to exit the market entirely.

Investor optimism is high, with 81% expecting the value of their portfolios to increase over the next 12 months. Nearly a third (31%) anticipate growth of more than 20%, while almost 50% expect a modest rise of around 5%. Optimism is particularly robust in Wales, where 59% of respondents foresee a significant upswing.

James Sproule, UK chief economist at Handelsbanken, commented: “While headlines in the coming months may focus on the general election, potential interest rate cuts, and the ongoing cost of living crisis, these factors don't appear to dampen investors' positive outlook. Adjustments to capital valuations, often masked by inflation, and rising rents mean property continues to offer a premium over gilt yields. This sets the stage for attractive opportunities as the economic recovery progresses.”

For overseas investors, this report highlights the lucrative potential in the UK property market, particularly in regions like the East of England, where yields are promising, and growth is anticipated. Magnate Assets will continue to monitor these trends and provide insights to help investors make informed decisions.