Russian and South African investors are cashing in when buying UK property with an effective discount of 21% due to currency changes since the Brexit vote, new research suggests.
Buyers from India and China are also reaping significant benefits despite house price growth of 6.23% since the referendum on the UK leaving the European Union in June 2016, according to the research from house building investment platform Homegrown.
With the value of Sterling having plummeted, only Turkey and Argentina out of the G20 countries are effectively paying more for property in the UK and overall millions of foreign investors face a dramatically better deal than a year ago.
Detailed analysis of the wealthiest G20 nations shows Russian and South African investors are getting the most money off with a 21% reduction on prices compared with 15 months ago and it means they can pick up a house that would have cost £1 million then for the equivalent of £841,000 in real terms today.
Brazil ranks third with a 17% 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% discount and the country appears mid-table with a slightly lower discount than buyers from Australia, India, Canada, Mexico and the EU.
Investors from India can pick up a house that would have sold for £1 million during the referendum for £898,656 with a 15% discount while the EU itself now benefits from a 16% discount on Sterling thanks to the significant shift in the Pound against the Euro in the wake of the vote.
The report suggests that 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 pay out more since the vote.
‘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,’ said Anthony Rushworth, founder of Homegrown.
‘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. Home owners have a vested interest in higher prices but we have to do the right thing by younger generations and keep building,’ he added.
Property Wire September 2017