Property

Foreign investors continue to bolster UK property market

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13th September 2017

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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