Brexit: Will London remain attractive to overseas buyers?

Brexit: Will London remain attractive to overseas buyers?

According to independent property buying agency, Black Brick, despite it being impossible to know how the property market would react to a potential exit from the EU, it is likely that London will retain its attractiveness to wealthy international buyers regardless.

Furthermore, Black Brick notes a rush of buy-to-let investors wishing to complete before April 1st but advises them to weigh up the costs and benefits of trying to rush through deals this late in the day as prices may soften post-April.

Camilla Dell, Managing Partner at Black Brick, comments: “One immediate impact of the prospect of a Brexit has been to hit sterling; between the end of 2015 and late February, UK currency lost 6% against the dollar and, over 18 months, the currency has slid almost 20% against the greenback. This serves to make UK property more attractive to dollar-based buyers; as is so often the case, opportunity is the other side of the coin to crisis and, if you add currency moves to the 7-7.5% falls we've seen in prices in Knightsbridge, for example, then prices are more than a quarter lower in dollar terms than they were 18 months ago. It's certainly tempting some overseas buyers back into the market.

London is going to retain its attractiveness to wealthy international buyers regardless of whether the UK remains in the EU; its cultural attractions, geographic location, legal system, and concentration of talent mean that there will always be demand for prime central London property.

We also note that, with just weeks to go before the introduction of a 3% hike in stamp duty payable on buy-to-let and second home acquisitions, as predicted, there is a rush among buyers to complete transactions before 1st April.

Certainly, for buyers who have had offers accepted, or who have exchanged, there's still time – and obvious motivation – to get deals signed and sealed before the tax rise.

However, we should sound a note of warning; for those clients yet to find the right buy-to-let investment, they should weigh up the costs and benefits of trying to rush through deals this late in the day. We have seen cases of vendors seeking premiums in exchange for getting transactions done before 1st April – premiums that, in some cases, substantially erode the tax benefit involved.

It's also worth bearing in mind that, as with previous increases in stamp duty, we expect this latest rise will feed through into asking prices and would expect prices for buy-to-let properties to soften after 1st April, as vendors' expectations align themselves with the yields demanded by investors.”

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daniel black
daniel black 25 Oct 2016

I've been keeping a close eye on what the effect of Brexit has been on the rental market and it's a very mixed bag. Whilst the majority of the news focuses on London's market. I think this time next year...

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Northerner 20 Oct 2016

Any views from outside the M25? No wonder politicians can't get the housing big picture when everyone seems to think that London is the yard stick, when it absolutely is not.

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Sean Lees
Sean Lees 13 Oct 2016

I think that the pest control really depends on the situation. If the tenant moved in and found an infestation that needs pest treatment service, I think it's more reasonable that the landlord should pay...

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Kevin 13 Oct 2016

Please Sian Berry Dan Wilson Craw LANDLORDS DO NOT WANT TO RAISE RENTS They are being forced to because of Section 24! An unfair, punitive tax hike that will be a disaster Green Party, Generstion...

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Fletcher88 11 Oct 2016

Absolutely agree! Moreover property prices edged up with 0.7% this month as the market recovered from the initial Brexit hit

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Gary Das
Gary Das 06 Oct 2016

A lot of lenders (especially the high-street banks and lenders people approach first) could do more to accommodate for the self-employed. It can really be a struggle, as I found out myself last year when...

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richardrawlings 04 Oct 2016

Not sure I understand this! If Basildon and Hemel rose 68% and 52% respectively, why do they not appear in the top ten list, which appears only to feature those in the minus 20's!! Is it me?

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luxus 27 Sep 2016

It can be stressful. More clarity is needed on the process, from a customer perspective and consideration should be given to using the Scandinavian model where the sales process is much quicker.

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Melissa_Green 26 Sep 2016

Green belts are normally designated around capitals and other major cities and conurbations and their aim is to prevent urban sprawl by keeping land permanently open. The essential characteristics of green...

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Jimmy_McCoy 16 Sep 2016

I think that the main reason to buy garden purchases in last minute is because people always search for the best deal. In summer months there are abundance of seasonal goods and it means more low cost

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Buying a home often is more expensive than you expect. There are lots of hidden costs such as: stamp duty, surveys and valuations, mortgages etc. that can add more than 10% to the total bill

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