Nigerians looking for a secure and lucrative way to grow their portfolio should consider investing in UK real estate. In this exclusive interview, Mark Pearson, the founder of Baron & Cabot, a UK property investment firm, provides expert insight on the advantages of investing in UK real estate.
He explains why it is the perfect choice for Nigerian investors and the best way to launch a successful real estate investment career. Mr. Pearson also highlights the various tips and strategies needed to make investments more profitable.
How can Nigerians protect themselves from scam businesses when investing, and how secure is real estate investment for Nigerian business owners?
One of the great things about real estate investment compared to other investments and the great thing about UK real estate investment is that it is highly regulated. The UK has the number one most transparent real estate market in the world, so we will be talking about a highly regulated market and the most regulated market in the world is the UK.
What this means is that all the data and properties are available. Every transaction is conducted through a solicitor, we have a solicitor in Nigeria that were trained in the UK. We actually have them in Lagos, so you can go and see them if you want to use them or you can use the database in England, not only that the solicit check our work, we do our duty as agents on every single property, then the solicit check our work and they do there own duty with diligence for the client.
Then the solicitors are regulated by the government and so the government checks all the solicitors and then us, finally, the solicitors are ensured which means that if they made a mistake and the client lost any money, the client can sue and get their money back. and therefore that is insured, aside from that, the insurance company is also overlooking these processes because they don’t want to have to pay for any mistake by the solicitors so the whole chain of complaints is conducted to protect all clients.
What steps should individuals residing in Nigeria take to learn more about investing in UK real estate and the process of converting cash to dollars?
Nigeria can start getting involved in buying UK Properties by speaking to Baron & Cabot; normally the process is that we structure meetings, where we educate the client over one or two different meetings on how to protect themselves in the UK, how you can invest in the UK, how Nigerians can get mortgages from UK banks at a very low rate, and all these are part of the process that will be explained to a client.
And then, very specific data and cash flows will be shared with the client, including ways and means by which the client can cross-check the work we have shared with them. Government resources online, in which they can check our work in terms of moving cash to dollars, there are very different ways, including a forex company that we are partnering with, which is regulated in both Nigeria and England.
What factors have enabled Baron & Cabot to successfully serve the Nigerian market over the years, and how have you been able to foster trust among Nigerian clients despite economic fluctuations?
We gain trust within Nigeria because we took the time to work with clients in the country even when it was very complex for Nigerians to buy in England and to get mortgages in England.
Over the last five years, we were able to make the process simple and because we were honest with the whole process and clients have made a lot of money, we were also given a lot of referrals. We also grow our reputation purely by delivering prudent service to help clients get the highest return possible in the safest manner possible.
Nigerians historically have a great connection with the UK and have witnessed over the years, the strengthening of the UK pound, the strengthening of the UK market, and the unfortunate weakening of the Naira. This means that most Nigerians are aware that investing in the UK is one of the better ways to be at risk than investing in portfolios.
Considering past cases of xenophobia around the world, is it easy to own and have full control of properties in a foreign land?
Xenophobia is an unfortunate part of life globally, one of the great parts of UK property/UK investment is that there are no restrictions or differences for a client investing in the country in regards to wherever they are in the world. In some cases and with Nigeria, due to the previous relationship with Britain, Nigerian clients actually get the before-tax breaks and tax deductions that a person living in England would receive.
The process of investment, the process of mortgage and ownership are the same for a client based in Nigeria, New Zealand, and others are exactly the same as a client based in England.
Has xenophobia increased or decreased in the UK and has this had an impact on your business?
While statistics have shown a decrease in Xenophobia in the UK, like any country in the world, education is important to avert xenophobia, and mile progression within the communities is reduced through education and ongoing understanding of cultural differences.
Can Nigerians buy UK properties without being in the UK, and what protections are there for them?
Nigerians can buy in the UK the same way and with the same legal protection as Uk buyers would be. The incredible thing about the modern day is that the client in Nigeria just like anywhere in the world can look at UK property and make a highly educated decision on their investment.
The reason for this is all data with regards to the property in the UK is published online, which means every single crime statistic, every occupation rate, and every single area of England has been mapped out Baron and Cabot even have the size of every single property in the UK and every single property transaction since 1997.
What this allows us to do is show the client the areas in the UK which are performing the best, which have the highest wealth of people, and which have new businesses coming to them.
All this information is available online and now with google earth and google maps, we can even walk around the property area showing the client exactly what he would see and should be flying over. Only about 5% of investors now visit the property and the rest of the investors look at the investment or look at it as a pure investment.
As the UK has been voted the number one most transparent real estate market in the world, this comes with online data available for people to make decisions as well as legal principles that protect the investors and their money. This includes the property investors, the solicitors, and of course, the government which wants to ensure that investors globally are buying in the UK and stimulating the economy.
Do Nigerians need to have a multi-million naira account balance to join this business? If not, what budget range is recommended?
Some people are surprised at how little an investor will need to buy into the UK property market and believe it is restricted for multi-millionaires. In fact what we found is quite the opposite, while we do have a small number of the elite in Nigeria and globally who will invest through our company.
The recommended 95% to 98% of our investors that we may consider as normal family people with good jobs and one or two made investments already in Nigeria or internationally. The range of investment can start from as little as 50,000 pounds with the average being around 82,000 thousand pounds or maybe a hundred or two hundred and twenty thousand dollars while this is not a small amount. It surprises many investors globally, especially with the increased property prices in Nigeria’s sales.
The benefit is that, once you invest that money, the remaining part of the property price can be paid with the mortgage, average overall property prices range from 200 to 3000 on average and around 70% of this can be covered with the UK bank offering a mortgage rate of around 6%.
What are the returns of this business?
On average, you can be in double-digit figures, so we can be looking at anywhere between 10 and 14% return on investment per annual. If we look at it over a 5 or 10 yrs period and in terms of yield, rented yield can be anywhere between 5 and normally 7% depending on how risky the investment is.
The beauty of Uk property is the ability to also leverage that with a mortgage whereby we can put down a smaller amount of investment but get a 100% of returns, meaning that we can triple or quadruple our investment returns. In addition to that, with the market being poised to see significant growth at the end of this year or 2024, the return is expected to increase slightly for investors coming into the market this year.
Who is your organization’s target audience, and how do you plan to engage people at the grassroots level in your mission and vision?
Our organization’s target audience tends to be young families or families with children getting slightly older and potentially with their eye on retirement or indeed children, university course, and de-risking the family from the devaluation of the currency.
We target clients through advertisements online, through speaking to news outlets, and by word of mouth which is one of the biggest practices of our business. We also work with major cooperatives around the country and make regular visits to conduct seminars within the country, including one seminar we will have at the end of February in Lagos.
In addition to this, we encourage clients and people to attend the seminars, and read the website, we have a lot of articles specifically for Nigerian clients and help them. Also speaking to friends of any part of major oil and gas firms, ask them about Baron and Cabot, you will start to understand the type of work we have been able to do for some of your colleagues.
What has Baron & Cabot accomplished since its creation, what progress has been made, and how have their services impacted their clients?
We are proud of the journey we have made so far and have made life significantly easier for Nigerian Investors in the UK.
We have a lot to be grateful for especially for the early Nigerian clients we worked with and one of the first client gentleman by the name of Emmanuel who supported us and was very keen to buy property in the UK and supported us in the time it took us to build some of the relationships to allow and more processes to be built as well as legal processes to be connected with Nigeria and processes for Nigerians to open with UK bank account.
As time progresses, our process becomes slicker and slicker and now for Nigeria investors are almost identical to investing anywhere else in the world through our company. However we have a long way to go, over the coming years, we are bringing more technology, more processes, and more partners to be able to make the user experience of purchasing a property in the UK.
Amazing for a Nigerian client or anyone around the world, the technology we would bring in, and some of which we will be learning this year includes machine learning and AI for price prediction for the clients.
In addition to this, we will be able to show the client more of the area around the property and have a deep understanding of the investment, long term after the purchase the client will have an app to help keep up to date with exactly what is happening in the property and exactly how much money they have made in each month and when they can remortgage or make or take money out of the property. All this is to come with Baron and Carbot as well as opening an office in Nigeria and having more people on the ground in the country via face-to-face.
What is the core mission of the Baron & Cabot company? Did you anticipate the economic instability of the Nigerian Naira, and do you believe real estate investment could be a path to financial security for both individual Nigerians and businesses?
We never predicted that Nigeria would be such a fast-growing market. Our main markets historically were Europe, Asia and small amounts in South Africa. However, we follow where the client comes from and we have a surge of interested people from Nigeria contacting our company by word of mouth through our very first client. This led to us starting a seminar in Nigeria and advertising within the country and press releasing through newspaper and tv outlets.
We mainly created the service and the process that was being demanded out of the country due to inflation and the depreciation of the Naira. We have not targeted the country due to this practice and had to educate ourselves about the Nigerian economy, and political and cultural parts of conducting business with the country.
I have to say that Nigeria has been one of the most incredible stories for us as a company and I believe in the people of Nigeria in what we manage to achieve for them.
What are the primary advantages of investing through the Baron & Cabot company for Nigerian clients, and what is the long-term sustainability of this approach?
The main benefit for UK property investment whether you are in Nigeria or anywhere else in the world is the protection mechanism in place to first of all protect your investment and give you full clarity on the risk involved and the benefit involved.
As mentioned before, the UK is voted to be the number one most transparent real estate market in the world. This means that not only can you make a very good return but they are considered the most transparent, and safest. Not only that, one of the major things about Uk property is consistency. Go back 100 yrs or 50yrs, 20-30 years. You will find over every 3 or 5yrs of consistent growth in property prices is the huge only supply of property in England.
It is very difficult to build properties in England, which means that property prices continue to grow. Along with that, there is increasing wealth and salaries among the tenants and purchasing is driving up property values in the UK. There is much less fluctuation in the Uk properties market globally, meaning that people can invest and leave their money for the long term, building massive passive income in a lower-risk investment time.
By: FERANMI OKUKU
