It’s been seven weeks since the UK voted to leave the EU – so what’s happened to the property investment landscape during this time?
It was one of the most significant political moments in British history.
On June 23rd, millions of Britons voted to leave the European Union. It was a result that prompted many to make wild speculations about what it would mean for the UK’s economy and property market.
So what has happened from a real estate perspective over the last seven weeks?
Overseas investors are buying more UK property
Britain has long been one of the global investor community’s most popular destinations, renowned for its transparency, stability and, crucially, growth.Immediately following Brexit, the pound fell to its lowest value for 31 years, making assets in the country for any investor dealing in dollar-pegged currencies around 12% more affordable.
And buyers from around the world have wasted no time in making a move in the market during this window of opportunity.Huge numbers of estate agents across the UK have reported rises in the number of transactions and enquiries from international investors looking to make a long-term investment during the immediate short-term period of uncertainty. Read more.
Chinese interest, in particular, has risen by 40%
That’s the assertion of China’s largest online property portal Juwai.Investors from the region are already heavily vested in Britain’s property market. Indeed Chinese buyers account for 5% of all residential property in London’s West End alone, and it would appear that the momentary decline in the value of the pound has prompted more to add UK real estate to their portfolios.
Referring to the change in prime minister last month, Bernie Morris, head of Juwai’s EMEA division, remarked that “with politics stabilising and a competent new government in place, the UK looks like the same old safe haven as ever – but cheaper”. He added that while Chinese investors “are looking for a bargain” during this period, their confidence in Britain’s real estate market is unwavering and that “they have long-term faith in the UK”. Read more.
But fewer investors are buying prime property in central London
Demand for investment real estate in the UK capital’s most exclusive postcodes has fallen by 10% since the second quarter of 2016. Approximately 75% of London’s prime locations have recorded either static or reduced levels of demand from property investors.For some time now investor appetite for London property has abated in the face of an affordability ceiling not made any more achievable following April’s introduction of increased rates of stamp duty on second homes and investment properties.
Since Brexit, sentiment has continued to dwindle. A report published by Countrywide, the UK’s largest estate agent, outlined a slowdown in the property market following the referendum is “more marked in London, the south-east and expensive prime markets”, with the rest of the UK remains unaffected. Read more.
Manchester named as one of the UK’s biggest hotspots for foreign investors outside of London
While interest for real estate investment may be waning in the country’s capital, overseas investors are continuing to turn their attention to high-performing regional cities instead.In August new research from Search Accumen found that Manchester has one of the highest densities of foreign property investment outside of London. Around 2,253 properties in the city were found to be owned by firms based overseas.
As regional UK investment becomes more widespread with the global investor community, Andrew Lloyd, Managing Director of Search Acumen, suggested that the research demonstrates “the reach of overseas business investment in UK property stretches far beyond the M25”. Read more.
Source, Select Property Group, 2016, Full Article Here