Research from Bank of London and The Middle East (BLME) predicted that the UK market was heading for a “once-in-a-decade economic alignment” that would create an opportunity for Gulf Cooperation Council (GCC) investors
The recent Bank of England interest rate cut from 5.25 per cent to 5 per cent could be a catalyst for an expected Gulf investment surge in UK property, according to a financial analyst.
Last week, research from Bank of London and The Middle East (BLME) predicted that the UK market was heading for a “once-in-a-decade economic alignment” that would create an opportunity for Gulf Cooperation Council (GCC) investors from Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain and Oman ready to deploy their capital.
Around 87 per cent of respondents to a BLME survey said falling interest rates would be the key driver of GCC investor appetite.
Now the BoE has made the long-awaited move to reduce the rate, Andy Thomson, head of real estate financial and private banking at BLME, believes the “wait-and-see” approach could end.
The cut in interest rates by the BoE is welcome news for Gulf investors in UK real estate, said Thomson.
We have already seen a marked increase in inquiries in recent months, which reflects increasing confidence in the market. Now that rates are beginning to drop, we expect to see a further rise in investment, he said.
Our research suggests that Gulf investors are focused on asset classes in the living sector – particularly PBSA, retirement accommodation and private rental schemes – as well as repurposing existing assets through the conversion of office blocks for residential use, he added.
Thomson said: With the new government’s priority to oversee an expansion in homebuilding, facilitating investment in these assets will be crucial to its success.
