Foreign investors continue to bolster UK property market

Foreign investors continue to bolster UK property market

Investors in South Africa and Russia are getting a 21% discount on UK property as the market continues to resist substantial falls, housebuilding investment platform Homegrown revealed today.

With the value of the pound plummeting since the Brexit referendum, millions of foreign investors face a dramatically better deal than a year ago - even with a 6.23% rise in house prices since June 2016. 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.  

That means they can pick up a house that would have cost £1m 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.

The real terms discount for G20 countries since June 23 2016.

G20 Countries

Discount %

Equiv. price of a £1m home

Russia

20.8

£841,104

South Africa

20.8

£841,642

Brazil

17.4

£877,739

Australia

16.1

£890,908

EU

15.8

£893,966

India

15.4

£898,656

Canada

15.0

£902,955

Mexico

14.0

£914,072

China

13.2

£922,225

South Korea

11.9

£935,551

Indonesia

11.4

£941,167

Saudi Arabia

10.6

£949,167

United States

10.2

£953,902

Japan

9.5

£961,480

Turkey

-6.6

£1,132,784

Argentina

-8.2

£1,149,938


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 Australia, India, Canada, Mexico and the European Union.

India is a key target for Britain’s Brexit trade deals after the decision to leave the EU. Investors there can pick up a house that would have sold here for £1m 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 vs the Euro in the wake of the vote.

Meanwhile it is bad news for Turkish and Argentinean bank accounts with their currencies falling below the pound despite its turbulent post-referendum ride.

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 fork out more since the vote.

Anthony Rushworth, founder of housebuilding investment platform, Homegrown, said: “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.

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. Homeowners have a vested interest in higher prices but we have to do the right thing by younger generations and keep building.”

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

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Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

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Chris
Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

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Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

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