Report reveals the foreign homebuyers who are most benefitting from dip in sterling
According to the latest research, it has been revealed that it’s foreign homebuyers from the United States who have benefited from a weakening pound to the greatest extent, with the average home now costing them 14.8% less across the UK.
The research by Alliance Fund analysed the average cost of a property across both the UK and London and how this cost has changed since the start of the year.
It was then calculated at what this cost translated to in the currency of 10 of the most prominent foreign home buying nations and how they have benefited from a weakening pound when it came to property affordability within the UK market.
The research shows that it’s buyers from the United States who have seen the biggest boost to their property purchasing potential within the UK market.
The research showed that in January of this year, the average UK house price of £272,833 equated to $369,825 US dollars at a rate of 1.36 USD to the pound.
As of today, the study shows the average UK house price has climbed by 7.1% to £292,118. However, with a weak pound now commanding just 1.08 dollars, the average UK home is now worth $314,932.
This means that US buyers in today’s market are securing themselves a 14.8% discount on the average price of a UK home.
Other countries revealed to benefit
Homebuyers from the UAE are also considerably better off when purchasing a UK property, according to the study. The average UK home now 14.5% more affordable due to the weaker pound, while in London this discount sits at 16.2%.
Buyers from Hong Kong are also paying less (13.9%) for the average UK home in their native currency and 15.6% less in London versus the start of the year, with buyers from Singapore also seeing a considerable boost to property affordability as a result of the weaker pound at 9.5% and 11.3% respectively.
As a result of the declining value of the pound, buyers from Canada, India, Australia and China are also benefiting from a boost to property affordability in the UK market.
However, for buyers from the Euro area looking to the UK for a property purchase. The high rate of house price growth across the UK as a whole means that they are now paying 0.2% more for the average UK home versus the start of the year.
The worst off from the study have been from buyers from Japan as a stronger pound on the Yen see them pay 7.3% more for the average UK home versus the start of the year.
CEO of Alliance Fund, Iain Crawford, commented:
“The current forecast for the UK property market may be starting to worry the nation’s homeowners, but one person’s loss is another person’s gain, particularly when it comes to the fluctuating value of bricks and mortar.
However, while opportunistic domestic investors are still waiting in the wings as house prices climb ever higher, a weakening pound has presented a great opportunity for many foreign buyers, who are now considerably better off when buying compared to the start of the year.
With the government’s latest economic interventions doing little to reverse the declining strength of sterling, buyers from the US, UAE and Hong Kong, in particular, are set to keep on saving when it comes to a UK property purchase.
This should help further bolster a rejuvenated level of foreign demand following pandemic restrictions. However, this activity is likely to be concentrated within specific areas, such as prime central London, and so it will do little to help negate the uncertainty that is currently hanging over the wider UK market.”
How will this impact the Register of Overseas Entities?
These findings come after the introduction of The Economic Crime (Transparency & Enforcement) Act 2022 which requires overseas entities that own or acquire property in the UK to register with Companies House.
The Act prohibits any application being made to HM Land Registry to register an overseas entity as proprietor of land unless, at the time of the application, the overseas entity has obtained its OE ID.
This means any foreign buyer of UK property will need to obtain the OE ID before it can take advantage of the dip in the pound.
Data tables
