Are we in Bargain Britain for Overseas Property Investors?
Political upheaval thanks to Brexit has triggered a chain reaction that makes the UK a hotspot for overseas investors. The value of the pound is around the lowest it has been since the vote was taken to leave the European Union in 2016, and this alone means investors are getting more value for their money than any other time in recent memory. Pair these bargain prices with enticing mortgage deals and low house prices, and it’s natural to wonder if this might be the best time ever for overseas investors to enter the UK property market.
Data published in the Daily Telegraph that compiled mortgage enquiries found most overseas mortgage requests came from nations whose currencies are pegged to the dollar – UAE, Singapore, Hong Kong, Saudi Arabia, and Qatar all fall within the top ten.
To get an idea of just how low the pound is against the Dollar, let’s look at the two currencies in 2014 compared to this year, 2019.
April 2014 – £1 = $1.68
April 2019 – £1 = $1.3
That’s a huge difference of $0.38. Let’s say for example that in 2014 you wanted to buy a property for £150,000, your investment would have an equivalent value of $252,000. With the condition of today’s currencies, a £150,000 property would be equal to only $195,000. That’s enormous difference of $57,000.
The current low value of the Pound Sterling and the correspondingly higher value for a purchase compared with previous, pre-referendum, prices is clearly enticing overseas investment. But the deal would be made even sweeter if the Pound were to reclaim its prior dollar value of $1.68. So, will the pound rise in the post-Brexit economy?
Of course it is somewhat difficult to say, but there are those who are optimistic about the strength of the pound. Throughout much of the chaos over the last couple of years the Pound has made several gains against the Euro and the US Dollar which does signify a certain degree of strength. The factors that will have the most impact on the Pound Sterling are the UK’s economic strength after Brexit and policy decisions made by the Bank of England, both of which are difficult to forecast.
But, we should remember that property is a long term investment and Britain is in unprecedented difficulty at the moment as the Brexit saga continues. Given time, stability and a new understanding of Britain’s place in European and world trade, it seems perfectly reasonable that the pound will once again retain higher values.
Here at Aspen Woolf, we have seen an interest from overseas buyers in all parts of the UK, but with a particular focus on the emerging and comparatively lower priced areas in Northern England. Overseas investors are able to score a triple whammy with their investment package: not only will they make the most of the low value of the Pound and the low house prices in the UK, but they will also be able to save even more if they buy with an off-plan discount.
Whether you’re from home or abroad, you can have a look at our investment options here.