In recent years, the UK property market has been a popular investment choice among international buyers. As the value of the pound has been falling, this provides an additional incentive and more opportunities for overseas buyers.
The weakening pound
During the past few months, the pound sterling has taken a tumble. It’s fallen by 8% in the last three months alone. This is largely due to the cost-of-living crisis, rising inflation and political uncertainty.
Recently, the value of the pound even dropped to its weakest level against the US dollar since 1985. On top of that, it’s also dropped against the euro to a 17-year low.
It’s unclear whether the pound will fall further. This will likely depend on the decisions made by the new prime minister, Liz Truss, in the coming weeks and months. However, the pound is expected to remain low against the dollar at least for the short-term.
The impact on international buyers
UK property has been an international market, and throughout the past few years, there has been particularly high demand from foreign buyers. Strong house price growth and the stability seen in the property market has made it especially attractive.
Now the lower value of the pound is making property in the UK even more enticing for international buyers, particularly for those with strong currencies such as the Chinese yuan. As the pound is worth significantly less against other global currencies, overseas buyers can get more for their money, which could make UK property an even better investment.
This means there are more opportunities on offer for international buyers, and they can maximise their budgets and take advantage of increased affordability and discounts. These factors make it a perfect time for international investors to buy property in the UK.
Throughout the coming months, more buyers from overseas will likely be attracted to the UK property market. The current market conditions present a great opportunity for those looking to purchase their first property in the country or expand their property portfolio.
The numbers behind international property investment
Overseas investors own 247,017 properties in England and Wales, amounting to £90.7bn, according to research by Benham and Reeves.
While London has traditionally been the main location for foreign investment, international buyers are increasingly looking at other locations as well to take advantage of stronger house price growth and rental yields.
The North West of England is attracting an increasing number of buyers from abroad. A recent report from Benham and Reeves revealed that approximately £1.1bn of property in Manchester is owned by international investors.
With the North West often tipped to have the most significant capital appreciation over the next five years, international buyers who purchase property now, while the pound is low, will likely see even greater capital gains.
There is expected to be a further influx of international interest in UK property as buyers try to secure bigger discounts. And a larger number of buyers will likely look outside of the capital and the south for properties.