Foreign buyers seeing discounts of up to 21 per cent on UK property
Investors from South Africa and Russia are getting a 21 per cent discount on UK property as the market continues to resist substantial falls, according to housebuilding investment platform Homegrown.
With the value of the pound plummeting since the Brexit referendum, millions of foreign investors face a dramatically better deal than a year ago - even with a 6.23 per cent rise in house prices since June 20162.
Detailed analysis of the wealthiest G20 nations shows Russian and South African investors are getting the most money off with a 21 per cent reduction on prices compared with 15 months ago. That means they can pick up a house that would have cost GBP1m then for the equivalent of GBP841,000 in real terms today. Brazil ranks third with a 17 per cent discount despite emerging from the longest recession in the country’s history at the end of 2016.
In recent years the consensus has been that China has been the global powerhouse fuelling demand for UK property. Investors there are enjoying a 13 per cent discount and the country appears mid-table with a slightly lower discount than Australia, India, Canada, Mexico and the European Union. India is a key target for Britain’s Brexit trade deals after the decision to leave the EU. Investors there can pick up a house that would have sold here for GBP1m during the referendum for GBP898,656 with a 15 per cent discount while the EU itself now benefits from a 16 per cent discount on Sterling thanks to the significant shift in the Pound vs the Euro in the wake of the vote.
Meanwhile it is bad news for Turkish and Argentinean bank accounts with their currencies falling below the pound despite its turbulent post-referendum ride. Turkey, perhaps due to political unrest, and Argentina, which exited recession in late 2016, are in the unique position among the G20 states of having to fork out more since the vote.
Anthony Rushworth, founder of housebuilding investment platform, Homegrown, says: “This just goes to show the incredible value that the UK property market still represents to armies of investors around the globe. Growth in the housing market has slowed over the last year but it’s still growing on an annual basis and foreign demand is bound to be playing its part. Demand for housing has showed no sign of abating in Britain while many still struggle to get on the housing ladder, so it’s vital the country addresses its chronic shortage of housing stock. Homeowners have a vested interest in higher prices but we have to do the right thing by younger generations and keep building.”