North American Investment Recovery Since 2008 Has Accelerated

American investors stopped spending in 2008, but have since started to purchase British homes once again.

American investors were once the biggest spenders in terms of property investment in the UK. Before 2007, when the British real estate market hit its absolute peak, money coming into the market from North America was far ahead of any other overseas nation.

However, as quick as American investors started buying in the UK, they stopped. When the property market collapsed in 2008, the level of investment from North America fell from £5.3 billion the year before to just £0.85 billion.

Clearly it was a crushing blow for the flow of cash across the Atlantic. However, ever since then, American buyers have shown that even though they initially feared the UK in post-crisis times, they have since come to appreciate the long-term sustainability that is inherent in the market.

In 2012, we saw the early stages of recovery, with some £3.7 billion of all the money spent on property in the UK coming from investors who were based in the US and Canada. And this has only continued to rise ever since.

In 2013, the level of investment coming across the ocean climbed once again, hitting some £5.1 billion, before there was something of a confidence boom in 2014. Last year, American investors piled their money into the British property sector, spending a little over £13 billion in the space of just 12 months.

And this year, it looks like the level of money coming into the UK from the US will be even more impressive. In just the first six months of 2015, US and Canadian buyers put a striking £9.5 billion into the British property market, which leaves experts full of confidence that 2015 will far outpace 2014 overall.

Oliver du Sautoy, LSH head of research, which looked into the figures in question, told Property Week that American buyers have spent far more money in the UK than any other nation, largely because of the fact they are comfortable putting money into specialist areas that promise real returns.

“They have deep pockets for specialist investments such as student accommodation and healthcare, and a fair number of these sales were quite distressed,” he said. The years following the financial crisis have been kind to such investments, though, and American buyers are now welcoming stronger returns than they have in recent times, which has incentivised them to buy even more than they did in the past.”

London-based property agent Experience Invest – who specialises in student property investment – has witnessed an increase of investor interest from the North American market.

“We’ve had a steady flow of investors looking for opportunities in the UK’s student property and care home markets. These asset classes have been a popular choice for a few years now however, we have seen a rise in the number of people wanting to invest from North America,” a spokesperson commented.

American investment in UK residential property has really gathered pace in the last few years and it looks like this trend won’t go out of fashion any time soon.