Chinese investors snap up Bristol properties
INVESTORS from China and the Middle East are snapping up properties in Bristol city centre.
A report from property firm CBR into the state of the market found wealthy foreign investors were flocking to the UK in search of bargains.
And the report highlighted Bristol as an investment hotspot which has found particular favour with Chinese investors.
According to the findings the distinctive Bristol Eye building, which overlooks the Floating Harbour in the Temple Quarter, has been popular with investors. Investors from China have bought a fifth of the building and there has also been a lot of foreign interest in the Finzels Reach development.
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The fact young professionals are finding it increasingly tough to get on the property ladder has also meant that the rental market has become more attractive to investors.
And there is evidence parents of Asian students at Bristol University, are investing in property for their son or daughter to live in.
Guy Mansell, from the Bristol office of CBRE, said: "When you look at Bristol it is good place to live with a high standard of living. There is plenty of wealth and job prospects and it is also quite close to London."
Vicky Dudbridge from Jones Lang LaSalle's specialises in evaluating the property market.
She said: "There is no doubt that the new homes market in Bristol attracts a lot of overseas buyers.
"Foreign investors and owner-occupiers are snapping up luxury, new build homes in the city as both investments and living opportunities."
She added: "The city is the capital of the South West so is a highly attractive area to live in, is has a strong economy and steady property prices so it is seen as a safe place to invest in and currently the predictions for 2013 show that GDP will continue to grow and improve.
"The strength and size of the universities provide a significant attraction to overseas buyers, many of whom want to be within reach of some of the UK's leading educational establishments for their children.
"Bristol University attracts a high number of foreign students, particularly from China and Asia and their parents are finding it more lucrative to invest in property for their son or daughter than to rent.
"If they stay in Bristol after they graduate they're already on the property ladder or alternatively with good rental yields the property can turn into a profitable buy-to-let investment.
"As well as buyers from China and Asia we've seen growing interest from the Middle East and Europe, particularly Russia and Germany and more interestingly, recently overseas investment has been supplemented by a new emerging trend of ex-pats re-investing in the UK, particularly in Bristol. This will be something to monitor over the coming year."
Estate agent Savills says 50 per cent of all flats sold in Bristol in the last six months went to foreign investors.
George Cardale, Savills' head of residential development sales in Bristol, said: "Our recent research shows that historic low levels of residential investment mean the supply of rental accommodation has not kept pace with rising demand, particularly in employment hotspots such as Bristol. The payment of rent, rather than mortgage interest, is now the focus for many younger households unable to raise the capital needed for a mortgage down payment."
He added: "Yields on some of our schemes in Bristol are exceeding six per cent. becoming an appealing option. Our team covering Bristol had its best month of the year in October and best October for five years.
"Schemes such as The Eye at Temple Quay, for example, offer investors excellent yields on city centre apartments, which sit beside Temple Meads and businesses such as Burgess Salmon. Of all the apartments the team sold in Bristol and Bath during October, more than half were sold to investor buyers."
According to Savills, the main challenge for the market now is a shortage of quality properties.
During the downturn many developments were put on hold.
Julian Harbottle, who heads up Savills development team in Bristol, said: "The return of the investment buyer is a positive thing and the continuing rise in demand for rental will fuel this further.
"However, it will take much longer for this confidence to filter through to developers buying land locally.
"The well capitalised national housebuilders and PLCs are in the best position to buy, but they are demanding viable, consented land which remains in short supply.
"Local housebuilders and developers who drive the small site market are continuing to be restricted by their ability to secure bank finance. There is significant opportunity for further residential development in Bristol and government policy is increasingly focused on boosting housing delivery. But until an upturn in confidence translates through to banks lending to developers, the market for land in the city, and the supply of apartments for investors, will be constrained."