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United Kingdom
The economy has remained robust since the June 2016 referendum and initial recession fears have proven unfounded. Despite leaving the EU in January 2021 and the pandemic, the British government were able to react quickly to provide monetary and fiscal supports, which help to drive strong growth in household spending and keep the economy on hold. As one of the most globalised economies in the world, the UK is well-positioned to exploit trade and investment opportunities internationally, particularly with non-EU countries. Brexit offers an opportunity for the UK to deepen trade ties and negotiate more favourable terms in the new bilateral trade deals with higher growth markets globally, thereby becoming more competitive and dynamic over the longer term.
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For the last 18 years, the UK had held the top spot for foreign direct investment (FDI) in Europe. Even with the Brexit and the pandemic, the UK is continuing to be the most attractive place to invest in Europe, securing a ranking of 2nd for FDI projects in the European league table. Additionally, its interest rate is low and steady, which helps to draw investment, development, and leasing activities.
Flexible & Stable Political Outlook
With the Conservative Party winning a majority of 80 seats in December 2019 general election, it has the freedom to shape post-Brexit policy without having to face any severe parliamentary constraints. The policy stability in the UK will see an improvement with the signing of the EU–UK Trade and Cooperation Agreement. Furthermore, Prime Minister Boris Johnson’s government remain stable and will most likely stay in place till the next election in May 2024.
Strong Economy Rebound
The UK has the potential to expand around 7% to 8% with the success of its vaccine programme, which will boost its recovery faster than other G7 nations. Its economy is growing at the quickest pace since the reopening from lockdown in July 2020, its GDP is expected to return to the pre-pandemic level by end of 2021.
High Demand in Real Estate
The UK property market continues to boom and is projected to rise 5% in 2021, as demand for housing surged, spurred by government support (mortgage guarantee scheme for first-time buyers), stamp duty relief and a tax cut. The house prices climbed at the fastest annual rate in nearly 14 years in March 2021. The strong momentum is expected to roll over to 2022. While the prices in London, which was the investment hotspot for foreign investors, is likely to lag due to the remote-working norm, the prices in the rest of the country will see strong growth. Over the next 5 years, London is estimated to grow 12.6% whereas a 20.5% for the Northeast.
Did you know?
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The UK has the world’s 5th largest GDP despite being the 80th largest country in the world.
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London accounts for only less than a quarter of the UK’s housing market, with a value of around £1.8 trillion vs £7.6 trillion of the value of housing stock in the UK in 2020.
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The UK mortgage approvals at the highest level in 13 years. The aftermath of the pandemic is the lower interest rate, stamp duty holiday, reassessment of living conditions as well as higher savings.