Spurred by the falling value of the British pound – down 10% against the dollar since the Brexit vote in June – and the perceived ‘safe haven’ status of the UK, overseas property investors are engaged in a spending spree, according to a report from the BBC.
“One agent has reported a thousand per cent surge in enquiries,” stated the news item. Asian and Middle Eastern buyers are prominent among the new wave of investors, looking to secure reliable income from assets that benefit from a stable political and economic environment, despite the current uncertainty surrounding the UK’s place in Europe.
Recent changes to stamp duty regulations – the tax paid to the UK government by property buyers – mean that properties valued below £925,000 are more attractive (incurring a 5 per cent stamp duty) than those above (with a 10% or higher rate).
In consequence, some overseas investors are buying multiple lower-priced properties, in outer London areas or elsewhere in the UK, rather than the multi-million pound central London options.
In August, an unexpected cut in UK interest rates from 0.5 per cent to 0.25 per cent – the first drop since 2009 – brought further cheer to the sector. Real estate professionals believe this will provide additional stimulus to the market as borrowing costs fall to historic lows.