Wealthy investors ‘exploit uncertain market and target UK property’

Wealthy investors plan to ramp up their investment in UK property, as uncertainty around the economy and house prices creates potential opportunities.

That’s the finding of new research from Investec Bank on the intentions of high net worth individuals (HNWIs).

Increase exposure

Corporate executives, finance professionals and entrepreneurs with average earnings of more than £510,000 were quizzed.

And more than three out of four (77%) are looking to increase their exposure to UK property investment.

On average, they will invest an additional £380,000. Around one in 10 (11%) are planning to increase their investments by £500,000 or more.

Just one in seven (14%) plan to reduce their investments, with 3% planning to stop entirely. Around one in 15 (6%) are not planning any changes.

Confidence

Their confidence in property suggests a positive outlook on house prices and interest rates among HNWIs, Investec says, and continuing support for buy-to-let investment and remortgaging.

Around 58% also said they have borrowed against an investment portfolio, with 21% of those people borrowing £250,000 or more.

A large number of high net worth individuals remain optimistic about the sector.”

Cheryl Quinn, Private Banking Team Lead at Investec (main picture), says: “Despite uncertainty around house prices, as a business we are seeing that a large number of high net worth individuals remain optimistic about the sector.

“Many view the current instability as an opportunity for increasing their exposure to UK property at an attractive price point, and very much value the ability to leverage income in order to fund investment properties.”

Struggle

But some investors struggle to access lending because of their complex income profiles, she says.

“This is particularly true of City professionals, who often receive a large part of their renumeration as discretionary income, and entrepreneurs, who usually have a large part of their wealth tied up in their businesses.”