Pound falls to 20-month low – time for UK property investors to act?

Pound falls to 20-month low – time for UK property investors to act?

Following the postponement of a crucial Brexit deal vote by the UK government, the pound has fallen close to its lowest value against the US dollar since April 2017 – and this creates a significant opportunity for international investors to buy UK real estate.

What’s happened?

On Monday 10th December, UK Prime Minister Theresa May cancelled a key vote in the House of Commons on the details of a Brexit deal, outlining the current terms of the country’s withdrawal from the European Union (EU).

The decision was taken after Mrs May admitted that the current deal on offer, one negotiated between her cabinet and EU leaders, “would be rejected by a significant margin” by MPs in Westminster. It means that she must now decide the best of course of action to take, with the UK scheduled to formally leave the EU on March 30th 2019.

Following this decision to postpone the vote, the pound fell to its lowest level against the US dollar for 20 months:

  • After markets closed, sterling was down almost two cents against the greenback, with the exchange rate hitting £1/$1.2562, close to its lowest level since April 2017
  • At £1/€1.059, the pound also fell 1% against the euro and reached its lowest rate since August 2018

What do international investors need to know?

Firstly, it’s important to consider the fundamental reasons for investing in real estate:

  • Long-term growth
  • A regular income from rental returns
  • Decisions based on supply and demand levels in key markets

Then, international investors looking at the UK property market should also remember:

  • Ongoing Brexit discussions does not change the fact that UK property is one of the strongest investments one can make globally
  • 340,000 new homes are needed each year until 2031 just to meet current demand
  • Demand for rental property will reach six million by 2025 – but just 100,000 purpose-built rental properties are currently in the delivery pipeline nationwide
  • Until this shortfall is addressed, property demand will remain extremely high in a sector of low supply

An immediate opportunity to buy UK property

With the pound experiencing a significant degree of volatility, it presents an unmissable opportunity for international investors to buy UK property now.

At Select Property Group, we’ve seen a number of investors in recent years use fluctuations in exchange rates to buy multiple properties, taking advantage of greater levels of affordability.

Strategically choosing to invest and enter the market now means investors give themselves the best opportunity to achieve higher returns in the long-term.

For further assistance and information regarding our latest UK property investment opportunities, please contact a member of the Select Property Group team today.

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