Estate agents are calling wealthy homeowners in London, alerting them to eager international buyers looking for cheap property in the wake of the pound’s collapse.
Sterling fell to a record low against the dollar of $1.0327 on Monday after Kwasi Kwarteng’s mini-budget, and although it has recovered slightly to $1.10, foreign investors will still benefit massively.
In response, homeowners took their properties off the market, but now there are reports of real estate agents calling them to say foreign investors are interested in buying their home.
Journalist Emily Sheffield of the Evening Standard tweeted: “Knight Frank (real estate agency) calls me out of the blue and says: ‘Just wondering if you’re still thinking of selling your property?
“I say, of course in this market, no. He says: “Because of the fall in sterling, many overseas buyers are looking for bargains.”
Similarly, Twitter user Alice Woodhouse posted a screenshot of a promotional email with the headline: “Pound is cheap, good time to buy”, encouraging foreign buyers to buy property in the UK.
Henry Synge, sales manager at Winkworth South Kensington Estate Agents, said interest from international buyers had increased in the last month but said nothing was “immediate”.
“There have been a few US inquiries over the past week – a few speculators who have come forward to park some money somewhere while it’s reasonable.
“Actual offerings are likely to lag further.”
He added that some viewings have been cancelled, but no deals have collapsed yet.
“I hope people keep buying, but we’ll see.”
Estate agents are reportedly calling wealthy Londoners who say foreign buyers are keen to buy their home because of the cheap pound (pictured: apartment buildings in Notting Hill).
Areas of London such as Notting Hill, Mayfair and South Kensington have seen a big surge in interest over the past week
London agency Robert Irving Burns reported a 35 percent increase in inquiries from foreign homebuyers since the mini-budget.
Managing Director Antony Antoniou told Prime Resi Journal that this was due to “incredible discounts” on offer.
He said: “The removal of the higher income tax rate and bonus caps for bankers means we have already seen a surge of interest in property worth over £2million across London.”
A London estate agent, Chestertons, told The Independent: “London has already attracted overseas buyers back to its property market since travel restrictions were eased, but weaker sterling is bringing foreign investor demand to new levels,” says Matthew Thompson, sales manager at Chestertons, said.
He explained how some of London’s most expensive areas, such as Knightsbridge, Mayfair and South Kensington, have garnered a lot of attention.
Mr Thompson said a property on the market for £4million would have cost an American buyer almost £1million more six months ago – when the pound was significantly stronger.
Buying agency Black Brick also saw strong interest from Middle Eastern buyers with large amounts of US dollars to spend.
Founder Camilla Dell said: “Most of them are looking for homes in Prime Central London with budgets between £5m and £20m.
“These shoppers are buying at a 27 percent discount compared to the same period last year, a significant saving to say the least.”
However, she clarified that there is still a supply problem in the best areas of London and some potential sellers are likely to be reluctant to sell now given the pound’s current decline.
A real estate agent said that US dollar-rich investors looking to buy a home in London will be buying at a 27 percent discount compared to the same period last year
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Homeowners are reportedly selling because they can’t afford repayments after warnings of a 6% rate hike, while banks added to the housing chaos by withdrawing mortgage offers.
Matt Garland, a senior analyst at Deutsche Bank, has warned the UK is facing a “mortgage time bomb” as rising interest rates will have twice the impact on consumer finances as rising gas and electricity bills.
North Wales estate agent Ian Wyn-Jones said sales are slumping as lenders are framing their mortgage contracts with interest rates expected to rise. He said four sales collapsed this week because mortgage offers were withdrawn.
Mr Wyn-Jones said: “People want to put their houses up for sale because they literally can’t afford the mortgages. It’s a terrible situation.
“In the coming weeks, people are coming in who want to sell now because their mortgage rates have changed and they want to get out.” He added that people are “getting cash because they don’t know what’s going to happen in the future.”
Sales assistant Robin Price has been saving for purchases for years – but fears that his dream has come to an end because of the price increases.
He told the BBC: “I just want a home. I can’t afford a mortgage anywhere in London or Essex because I don’t earn enough.
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