As a result of the depreciation of the pound over the months leading into to the EU referendum, European property investors have saved up to £26,000 purchasing discounted London homes.
Over the 7 month period before the referendum, which could still see the UK leaving the EU, paying for London homes with Euros, could have saved investors as much as 5.3% of the overall price.
With bargains on the market, London has, therefore, recently felt a property market wobble in the face of post-Brexit uncertainty. According to analysis by London Estate Agents Stirling Ackroyd, house prices have fallen by €33,200 meaning that the average house in London now costs €596,900. This is far cheaper than the November 2015 high of €630,100.
Managing Director of Stirling Ackroyd, Andrew Bridges, explains: “European buyers are snapping up bargains across London. A declining exchange rate has meant London is becoming a more affordable global property hotspot – particularly for those paying in Euros.”
“If Britain votes to leave the EU, Sterling is set to fall further so, ironically, London would become even more affordable – and therefore more attractive – to overseas buyers paying in Euros” Mr Bridges continues, adding “while Eurozone buyers are propping up the temporarily soft market as prices stutter, Brexit might make Europeans much more significant players in London’s property scene.”
KCW Today previously reported that many luxury properties are being sold at cut price rates, with the sale price in London boroughs such as Royal Borough of Kensington and Chelsea (RBKC), and Westminster, being reduced by as much as third off the sale price.
In Stirling Ackroyd’s latest research, it has been shown that the top 25% of London’s market fell annually by -2.4% in the last quarter of 2015, which is a dramatic swing away from the annualised +8.2% growth enjoyed by the majority of neighbourhoods.
Above any other regions, London’s West End is particularly feeling the pinch of the pre-referendum slowdown. Kensington High Street (W8) suffered a quarter-on-quarter fall of -11.8%, closely followed by Notting Hill (W11) closely which fell by -10%.
Commenting further on the effect the referendum has wreaked on London’s most affluent areas, Andrew Bridges says, “after the referendum chatter has calmed down the bright lights of London will be undimmed – whatever the result.” He adds, “London’s resilience is second to none” and while “house prices may be cooling slightly in the face of geopolitical uncertainty – this is offering bullish buyers opportunities.”
“The luxury areas of London’s property market are feeling the acutest drops in house prices but these areas typically have a higher proportion of European buyers – meaning exchange rate discounts on property purchases are compensating for any further slowdown.”
Mr Bridges concludes: “speculation about the aftermath of the result is rife, but London’s reputation as a valuable property investment hotspot remains undiminished, the capital is fully equipped to combat the consequences of either a Remain or a Brexit vote.”