Property prices continue to rise in London whilst wealthy overseas investors take advantage in the devaluation of the Pound

It has been estimated that house prices in the UK, including London, will continue to rise in 2017, despite the ongoing Brexit uncertainty. Industry experts claim that as long as the housing crisis continues and there is a shortage of housing stock available, property prices will continue to rise.

In London, property prices increased 1.8% from November to December. In 2016 the national average for house price growth was 7.7%. Figures taken from February show that house prices accelerated last month, rising by 4.5% in a year, bringing the cost of the average home in the UK £205,846.

One property expert spoke of how housing has been gaining momentum in recent months.
“The housing market may have plateaued during last summer but for the final two months of 2016, prices regained momentum.”

“Until more properties are built for both buying and renting, the market for investors looks positive as prices continue to move upwards although overall at a gentler pace than before,” Rob Weaver, Director of Investments at Property Partner told Wharf.

Overseas investors are looking to London

In terms of investors purchasing property in the British capital, foreign investors are honing in on London, taking advantage of the Pound’s deterioration in the wake of the Brexit vote.
Recent research found that wealthy investors from the likes of Turkey, India and the Middle East, are attracted to London, namely because of the pound’s post-Brexit slump against the dollar.

The devaluation of the pound

Since Britain voted to leave the European Union last June, the pound has decreased by 18% against the dollar and by 12% against the Euro. The slump of the pound has, according to a 2017 Wealth Report, which analyses high-end residential property in sought-after cites around the world, created investment opportunities for those investing in London with US dollars.

As The Independent notes, the average price of a “ultra-prime residential property” in Mayfair in 2015, cost $5,306 per square foot. This fell to $4,741 per square foot, a drop of 10.6%, purely because of currency fluctuations.

This decrease in the value of London property when making purchases with dollars, as led to a “wave of enquires and buying demand” in London, predominantly for properties with a £5 million or above price tag.