Cheaper Pound Makes Property Attractive to Foreign Investors
Impulsive actions often lead to underdeveloped plans and ideas. After the Brexit vote, it is easy to understand why both buyers and sellers in the UK might become impulsive to purchase, sell or rethink their investments.
Some experts have determined it would be unwise to jump in or out of the UK market until the negotiations with the EU are finalised and the magnitudes of the Brexit vote is realised. But for international buyers, they see an opportunity to take advantage of the 31-year low for the British Pound.
For international buyers, there isn’t much incentive to wait around to see if the traditionally strong British pound and economy rebounds. The uncertainty has only increased international investors short-term interest in picking up a UK property at a discounted price.
The past year has been defined by hesitancy from international – particularly Asian – buyers in the UK waiting to see the outcome of the referendum. It is expected that Singaporean, Hong Kong and Chinese investors will be looking to capitalize on the weakened pound by purchasing commercial and residential properties.
However, the buyers aren’t the ones with hesitation post-Brexit vote. Lenders in Asian countries such as the United Overseas Bank in Singapore have put a hold on lending to investors interested in purchasing UK-property. Although there are still lenders that trust in the UK’s economy and willing to lend to Asian buyers, there is a much greater influx in intrigue from countries pegged to the US Dollar such as the Middle East, North America and India.
Peaked Interest from India
High Net worth Individuals from India have always been attracted to London. Reports suggest the Indians have invested more than 1-billion pounds into luxury homes around London in the year 2014-2015, accounting for 25% of sales around the capital.
London is attractive to the Indian mega-rich for many reasons including its economic status and being a worldwide financial hub.
The Brexit vote has peaked interest among Indian investors even more. Indian investors that already have property investments around the capital saw their investment increase by more than 10% due to the weakened pound.
There are reports that “mega-deals” have already been struck between India’s High Network Individuals and property-realtors in London. Experts in India have been recommending that their clients purchase big and trust that their long-term investment plan will reap many rewards.
UK Housing Market Will Remain Strong
In the short-term, International buyers see an opportunity. However, the property market in the UK will still remain short on supply, and potentially the supply could decrease due to workers leaving the UK and investors acquiring a “wait and see” approach to the UK-EU Fall out.
It is expected that the rental market and properties with mid-to-low value will be cushioned by their high demand and tight supply. The only markets expected to really feel the effects are prime housing in London and commercial properties.