Since 51.9% of voters opted to take Britain out of the EU in the June referendum, the pound has plummeted. In the immediate aftermath of the shock vote, Sterling dropped to a 31-year low against the Dollar. Since then, it’s fallen even further.
Though this is going to make daily life – and holidays - more expensive for Brits, it’s good news for foreign investors. Overnight, their spending power has skyrocketed, making the UK a very attractive place to buy and providing wealthy investors with the chance to snap up some property bargains.
Though property prices in the UK continue to increase, the relative value of the Pound compared to foreign currencies means that, to international investors, UK property is now a lot cheaper. In the days after the vote, The Independent reported that British estate agents were swamped with calls from Chinese, Middle Eastern and European buyers looking to grab a bargain, with enquiries up around 50%.
Thanks to the record drop of the Pound against the Dollar, the UK is now very attractive to foreign investors who earn their money in their native currency. Property is now around 15% cheaper than before the vote, something that’s lead to US expats in the UK tripling their investment in property.
Even though the Euro also took a hit following the vote, buyers from the Eurozone have been equally keen to get involved in the UK property market, with investors from Italy and Spain leading the charge. According to estate agent Stirling Ackroyd, on average, buyers from the Eurozone gained a €50,900 (£42,000) discount on London property overnight. With savings like this to be made, it’s no surprise that more and more foreign investors are taking an interest in the UK property market.
What does the future hold?
According to the NIESR, the UK’s oldest economic research body, the pound is expected to remain at the same level for the rest of 2016 and throughout 2017. Currently Sterling is valued at around $1.22 and €1.11, levels that will make UK property continually attractive to overseas buyers.
Unless the Government places limits on foreign investors able to buy in the UK, it’s likely that the number of overseas deals will only increase as the year goes on.
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