Directly comparing property in the UK and Switzerland brings up some interesting figures. Due to its reduced size, Switzerland has a much lower range of assets available compared to the UK, meaning a much more competitive market that has driven property prices much higher.
The average UK property price in some of the bigger regional cities sits at around £200,000 (Birmingham), £169,000 (Liverpool) and £189,000 (Manchester). These prices alone make it easy to understand why Swiss investors often look overseas for their investments, particularly when favourable foreign exchange rates can often mean better value within more affordable markets.
Growth has also been much stronger in the UK between 2000 and 2016, despite Switzerland seeing substantial price increases. Swiss property rose by around 80.5% in those 16 years, while the UK saw price rises of 144%. However, the Swiss markets relative lack of affordability and the rise of the Swiss currency against the Euro means Swiss real estate has seen much less demand from foreign investors.
Homeownership in Switzerland is low (around 60% of Swiss residents rent their property), mostly driven by limited housing stock, rising prices and restrictions that delay property purchases.
In the UK it is a very different story. Renters only make up around 25% of the housing market but it’s a figure that is rising fast. As Generation Rent comes into play – driven by affordability challenges and a priority on flexibility – which is seeing homeownership levels in the UK drop. It’s expected by 2039, renters will outnumber homeowners in the UK market, demonstrating the pivot to a more ‘European’ approach to home life.
When all of the above is taken into account it’s easier to imagine why such a large majority of European investors, particularly from Switzerland, are looking to the UK for their next investment. Business links between Switzerland and the UK remain strong – bilateral trade is worth almost £31.7 billion a year – and foreign exchange rates mean Swiss investors can leverage their income against a weakened Sterling, presenting the opportunity for incredible value.