ONS HPI: Foreign investors getting discounts of up to 21% on UK homes since Brexit vote

ONS HPI: Foreign investors getting discounts of up to 21% on UK homes since Brexit vote

UK HOUSE MARKET BUOYED BY

FOREIGNERS’ DISCOUNTS TOPPING 21%

  • Russian and South African investors are cashing in when buying UK property with an effective discount of 21% since the Brexit vote
  • Economic powerhouses India and China are also reaping significant benefits despite house price growth of 6.23% since the referendum
  • Turkey and Argentina are the only G20 countries paying more for bricks and mortar

 

London, 12 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 today1.

 

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 20162.

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.

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.

 

TABLE: 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

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.”

Enter your e-mail address to receive updates straight to your inbox

Sign up to Investment Insights direct to your Inbox...

Categories: News, Property

About Author