Despite the fact that football in the UK tends to grab the headlines for all the wrong reasons, it was revealed today that the influx of overseas players into the Barclays Premier League could lead to a further £100 million injection into the UK property sector. This comes at a time when the UK market is under pressure, mortgages are difficult to come by and indeed the economy is struggling to pull away from a triple dip recession.
How is £100 million suddenly available?
It is the phenomenal wages which are now available in the Barclays Premier League which is leading the way to significant investment in the UK property sector. While many of the overseas players moving to the UK will initially move into rented accommodation, often costing thousands of pounds per month, they will eventually likely look towards a permanent residence. We have already seen the influence of highly paid footballers in the UK property market and indeed the second their homes are listed on property sites seems to indicate that they are on the move again!
Newcastle United has been very active in the transfer market over the last couple of years with a large contingent of French players moving to the region. This has led to a significant increase in activity across the higher end of the Newcastle property market and indeed French costumes and French outfits have been bought up in large amounts by Newcastle United fans!
Is there value in the UK property market?
There is no doubt that the UK property market has been a very good investment in the long-term even taking into account the potential triple dip recession on the verge of which we stand at the moment. Whether or not we move towards a triple dip recession is slightly irrelevant in the short term because it is the medium to long-term picture which needs to be resolved.
Quote from PropertyCommunity.com : “UK buyers accounted for the majority of property purchases in the prime market in London in 2012 but more foreign buyers are snapping up real estate in the UK’s capital city and this trend is set to continue.”
David Cameron recently announced plans to introduce a referendum on the EU if he is voted back into office and this could have a significant impact upon the UK property sector. Over the years we have seen major investment from overseas including Europe, the Far East and America. Whether this would be impacted if the UK was to move away from the core group of EU leaders remains to be seen but there is some uncertainty in business circles.
The short-term outlook for the UK property sector
Over the last few weeks there have been some encouraging signs in the UK property sector, mortgage applications are up, funding is more available than it has been of late and indeed property prices do appear to be consolidating. Even though property prices have not moved ahead over the last 12 months the very fact they have not fallen is something of a godsend for some people who are struggling with negative equity at the moment.
London as ever seems to be the focal point of the UK property sector and over the last few weeks we have seen overseas investors looking to this particular area regain. It will be interesting to see whether this increased demand for London property continues in the short to medium term because ultimately this could drag the rest of the UK property sector out of the doldrums.
While a potential £100 million injection into the UK property sector is neither here nor there in the long-term, it does give some positive headlines to the UK property sector as more and more highly paid footballers ply their trade in the Barclays Premier League. It will be interesting to see whether the higher end of the UK property sector, and in particular in areas such as Newcastle which has taken on a number of French players, does show signs of improving sentiment.