BREXIT RESULTING IN BUY-TO-LET BARGAINS FOR EXPATS

The UK buy-to-let market is now more attractive to expat and overseas buyers owing to the Brexit effect, mortgage broker Offshoreonline.org has argued.

Since the Brexit referendum in 2016, the rate of price increase in the UK housing market has fallen from 8.2% per annum in June 2016 to 1.3% in September 2019.

Combined with the weaker value of the pound sterling against the Euro or US Dollars, UK property is now arguably better value for money.

Guy Stephenson, director of Offshoreonline, said: “For the expat buyer of UK property, the Brexit effect has been a gift.

“Not only has sterling depreciated against key currencies such as the euros and US$, which effectively means an instant price reduction, but the domestic uncertainty caused by the Brexit vote had impacted the market too.

“Over the three years since the UK voted to leave Europe, housing market activity levels have weakened, as domestic confidence evaporated. This means that the percentage rate of house price rises seen prior to 2016 simply has not been repeated.

“As confidence in the politicians had ebbed, so activity in the housing market has reduced. Inevitably, prices have not risen as fast as they might have done, giving buyers an excellent opportunity.”

The Conservative Party is set to introduce a 3% surcharge on non-UK residents if it wins the upcoming election.

INVESTORS ARE TURNING TO PROPERTY IN THIS UNCERTAIN MARKET

With economic and political uncertainty more investors are turning to property, Butterfield Mortgages Limited (BML) has found.

Some 61% of investors believe traditional assets like property are best positioned to deliver stable and secure returns during the current political uncertainty.

A fifth (20%) said they plan to increase the amount of money they have invested in real estate in 2020. Property is the second most common asset for investors (41%).

Alpa Bhakta, chief executive of BML, said: “In this era of political uncertainty, investors are rallying towards traditional asset classes like property, which are historically resilient and able to hold their value in times of transitions.

“The fact a significant proportion of investors are planning to increase investment into property in 2020 shows that despite Brexit, demand for real estate remains resoundingly strong.

“Interestingly, the factors influencing financial strategies are also changing – on top of security and stability, investors are also taking into account the environmental and social impact of their investments.

“This will evidently be an important trend over the coming years and is something both financial services firms and advisers will need to pay attention to in 2020.”

Some 42% are holding off making any major investment decisions until Brexit has been resolved.

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