Why South Africans are investing in UK property

South African investors looking for a stable, but rapidly expanding property market should keep their eye on the UK.

Despite global economic uncertainties, the UK continues to offer a compelling combination of structural supply shortages, strong tenant demand, and favourable borrowing conditions compared with South Africa.

Mikayla Morkel-Brink, offshore real estate advisor at Sable International, points to a fundamental imbalance driving the market: “UK housing has a supply shortage. The government is building about 300 000 new houses per year, but the annual shortfall is about 100 000 a year.

“It will take years to close this gap. Demand keeps rising, making it easier to find tenants, which is what you want from an investor point of view.”

Recent data supports this analysis. In 2025, England delivered around 208 600 to 231 300 net additional homes, falling short of the government’s 300 000 annual target.

This persistent undersupply, combined with rising household formation and limited new stock, continues to support both rental demand and capital values over the medium term.

For South Africans, the appeal goes beyond numbers.

“As a South African it’s important to diversify into a Sterling-based asset,” says Morkel-Brink.

“The UK is a long-term play with strong fundamentals driving growth.”

With the South African rand often volatile, holding property in pound Sterling provides a natural hedge against local currency whiplash.

The recent increase in South Africa’s Single Discretionary Allowance (SDA) from R1 million to R2 million per adult a year (effective April 2026), has made smaller UK investments more accessible without full tax clearance, allowing couples up to R4 million annually.

The London commuter belt

Sable International favours locations in the London commuter belt, where lifestyle, connectivity and economic momentum converge. One project that stands out is Reading Riverworks – just 23 minutes by train from central London and situated on the River Thames.

“Reading is the biggest tech hub in the UK,” notes Morkel-Brink. “Businesses are moving out of London to cities like Reading and this relocation is driving tenant demand.”

The Thames Valley region, including Reading, hosts major tech and corporate players, with strong growth in AI, fintech and digital sectors.

Companies continue to relocate or expand here for lower costs and better quality of life, while remaining well-connected via the Elizabeth Line and fast rail links.

Reading Riverworks is a landmark waterfront development by one of the UK’s largest and most respected developers, Berkeley Group.

Located on the site of the former SSE power station along Vastern Road, the project is transforming the riverside into a modern community of over 200 one-, two-, and three-bedroom apartments. Many units offer direct River Thames views, with easy access to a riverside walkway and Christchurch Meadows.

Key attractions include its prime position: a three-minute walk to Reading Station (with 20- to 23-minute trains to London Paddington), under 10 minutes to the town centre and The Oracle shopping area and excellent transport links.

Construction progress is visible, with phases such as Thames Reach (55 apartments) recently highlighted, and completions phased through 2027–2028.

Prices start from approximately £325 000 to £332 000 for one-bedroom apartments and £399 950 to £475 000 for two-bedrooms, extending up to around £791 000.

Morkel-Brink notes strong tenant demand in this location, with potential net yields around 6% in Reading – which is competitive with other areas, particularly when paired with solid capital growth prospects.

Some analysts forecast UK house price growth of 2% to 4% in 2026, with certain commuter-belt and tech-driven areas potentially delivering higher appreciation over five years.

South Africans can apply for UK mortgages

UK mortgages remain accessible to South African investors, with typical loan-to-value (LTV) ratios of 60% to 75%. Current interest rates (around 4.5% to 5.5% for many products) are significantly lower than South Africa’s prime rate of approximately 10.25%.

“Rental income can cover your total mortgage cost,” explains Morkel-Brink, and the ability to remortgage when rates fall adds flexibility.

Lenders consider rental income but require evidence of surplus income. Sable International recommends clients have around R3.5 million (about £150 000) in liquid capital for comfort.

Full cost transparency is essential – including legal fees, stamp duty, and forex costs. South Africans familiar with buying in trusts can structure via a UK Special Purpose Vehicle (SPV) for tax efficiency.

How Sable International can assist

Sable International assists throughout the process: sourcing properties aligned with investment goals (short- or long-term), coordinating UK ground agents for viewings, handling mortgages, forex transfers and portfolio structuring.

Many clients buy with children’s future education or a UK nest egg in mind.

A stable, resilient market with growing appetite

The UK has historically proven stable and resilient.

While some northern regeneration areas offer higher yields (7% to 8% net in places like Birmingham or Manchester), Reading’s blend of capital growth potential and lifestyle appeal makes it particularly attractive.

Interest from South Africans has strengthened, with Sable International noting a robust end to 2025 and growing appetite in 2026.

Whether paying cash within the enhanced SDA or blending with mortgage finance (such as a 50% deposit), the structure can be tailored.

For South Africans seeking a Sterling asset in a supply-constrained, tech-driven commuter hub, Reading Riverworks by Berkeley Group represents a focused opportunity.

As Morkel-Brink emphasises, the UK remains a long-term, stable play – one that can deliver both income and appreciation while diversifying away from Rand exposure

Brought to you by Sable International.

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