GCC Investors Capitalize on UK Property With Declining Interest Rates and New ETA Scheme

| September 2, 2024
GCC Investors Capitalize on UK Property With Declining Interest Rates and New ETA Scheme
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Investors from Gulf Cooperation Council (GCC) countries are increasingly interested in buying property in the United Kingdom (UK).

GCC countries include Saudi Arabia, the United Arab Emirates (UAE), Kuwait, Qatar, Bahrain, and Oman.

These nations have always been interested in international real estate, and recent changes have made the UK a particularly appealing market.

These include recent visa rule changes for GCC nationals and favorable economic conditions for property investment.

The UK ETA and GCC investment interest

A survey by Select Property, a UK-based property developer, showed that 87 percent of GCC investors plan to invest in UK real estate in 2024.

Adam Price, CEO of Select Property, said GCC investors interested in UK real estate “want to make money from renting out the property.”

They also want to “take advantage of the UK’s economic opportunities,” he added.

The UK government’s interest rate cut has made mortgages more affordable, which is a significant pull for foreign investors.

Additionally, the UK’s new Electronic Travel Authorization (ETA) has made it easier for GCC nationals to visit the UK regularly.

The UK ETA opened for Qataris in November 2023 and the rest of the GCC countries in February 2024.

GCC nationals previously required a single-entry electronic visa waiver (EVW) every time they visited the UK for short trips.

The UK ETA, on the other hand, allows multiple short visits to the UK over two years.

The new digital travel permit is also much cheaper at £10 per application, while an EVW costs £30 for each application.

This change streamlined travel and simplified the decision to purchase property and manage investments in the UK.

Reason for GCC investors’ interest in the UK

GCC Investors Capitalize on UK Property With Declining Interest Rates and New ETA Scheme
Image courtesy of Mohammed Mohammed via Pixabay

Adam Price explains that the increased interest of GCC nationals is due to several key factors.

Strong UK economy

The UK’s cities of London, Birmingham, and Manchester are economic hubs and offer good returns on real estate investments.

For example, the West Midlands economy, which includes Birmingham, is expected to grow by AED 46 billion ($12.5 billion) over the next five years.

Major projects like the HS2 high-speed rail will likely increase property values.

Price emphasized Birmingham’s potential: “HS2 is improving the city’s connectivity and boosting its property values.”

The city is also “making good schools, job opportunities, and affordable housing more accessible for homeowners and investors.”

Good rental income

The UK offers some of the best rental returns in Europe, with cities like Birmingham showing returns between 6.6 percent and 8 percent.

This is immensely inviting to GCC investors, who often seek stable and long-term investment growth.

The high demand for rental properties in these cities ensures a steady income for investors.

Education opportunities

The UK is home to some of the world’s best universities, which is a massive pull for GCC families.

Over 8,000 students from the United Arab Emirates are currently studying in the UK—a number that has nearly doubled in the last five years.

Many investors buy properties in the UK to support their children’s education.

Select Property has also noticed an increase in interest from Saudi investors who want to buy property in Birmingham.

Birmingham’s reputation as the largest center of higher education in the UK and a top city for student housing adds to its appeal.

Luxury properties

GCC Investors Capitalize on UK Property With Declining Interest Rates and New ETA Scheme
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GCC investors value luxury real estate, particularly branded residences offering high-quality living and prestige.

These properties have top-notch amenities and are located in prime areas, making them a popular choice for investors.

“Branded residences have been a focus for KSA [Kingdom of Saudi Arabia] investors because they offer prestige and reliable returns,” Price explained.

The study showed that 69 percent of Saudi households want to own and invest in luxury property in the UK.

What’s next for GCC investors in the UK

GCC investment in the UK is expected to grow. Experts predict that AED 11.7 billion ($3.2 billion) will be invested in UK real estate in 2024.

Falling interest rates, a robust economic outlook, and more accessible travel rules create an ideal environment for investors.

It is an ideal option for investors looking for stable returns and long-term growth.

“Investors who enter the market now, while interest rates are low and new developments are happening, will be in a good position to make the most of the market,” Price said.

The UK ETA scheme helped Gulf investors increase their interest in entering the UK real estate market.