The hot and continuously debated topic of Brexit still remains on the lips of the British public. Newspapers constantly print the latest deal/no deal saga and speculation is spreading like wildfire. But the uncertainty surrounding Brexit hasn’t bothered foreign investors in the slightest. In fact, the UK property market has now become a target for them.
Is It Faith Or Opportunity?
Wealthy investors all over the world have been snapping up homes on the UK property market. According to reports, the sale of property worth £10m or more has tripled since the British public voted to leave the EU. Approximately 100 houses sold for £10m or over the year before the Brexit vote compared to the 300 that was sold the year after the vote. Since the referendum, the pound’s value has fluctuated somewhat, and foreign investors have seen this as an opportunity. Either that or they have a lot more faith in the country than some people do. Whichever way you look at it, for the sale of these luxury £10m+ houses to triple speaks volumes. Property experts believe that the 13% drop in the pound is what caused foreign investors to start purchasing these luxury properties in the UK.
The Lower End of The UK Property Market
While activity was high at the top end of the market, the lower end of the market took a bit of a hit with British buyers. Following the referendum, the media went crazy with speculations and rumours which to an extent put many British people off buying property. But still, a reasonable rise in foreigners willing to invest in UK property was found in the mid and lower end of the market. As the Brexit commotions continue to drag on the uncertainty remains amongst the British public, but despite all of that the property market hasn’t suffered as much as people first thought.
Stamp Duty’s Impact on UK Property Investment
One of the believed reasons that foreign investors have snatched up some of the countries best properties since the pound dropped is because that drop has more than covered the 3% stamp duty surcharge for second homes. This charge was introduced by the government in 2016. In June 2015 the pound was worth $1.59 whereas following the vote the pound dropped to $1.26. For properties worth more than £1.5m the stamp duty is 12% for a first home and 15% for second homes. In the tax year of 2016-2017, the government received £7.3bn from stamp duty with £3.4bn of it coming from London alone. In the 2017-2018 tax year, The Treasury received £4.1bn from stamp duty for second home sales which worked out at a 21% increase from the previous year. So, for foreign investors, the Brexit vote resulted in very attractive investment opportunities that were too good to turn down for some.
A Glance At What’s Been Purchased
Some very high-class property has been sold around London, and although they still sold for millions, the buyers still bagged a bargain. In a private estate near ascot a 9 bedroom mansion sold for £15m. In the renowned Primrose Hill in north London, a 7 bedroom property has sold for £17.4m. Prior to the sale, the property had remained within the same family for 45 years. One of the most expensive properties to have been sold includes a grade 1 listed mansion in Belgrave Square. The five-storey property once belonged to the seventh Duke of Devonshire, William Cavendish. After almost 10 years on the market for £100m, it has finally sold for £60m. Meanwhile, a property in Oxford recently sold for £10.5m. This particular 7 bedroom house was once home to novelist Mary Augusta Ward. In London’s famous Chelsea area, a townhouse consisting of 6 bedrooms and overlooking a private cricket pitch has sold for £13.7m.
The Buying Situation Now
As it stands, the demand for properties worth millions still remain. However, a majority of the British public are eagerly awaiting the final outcome of Brexit. Wealthy foreign investors still have their eyes on UK property investment and do not hesitate if the right opportunity comes along.
So for some, Brexit has definitely provided considerable opportunities in terms of property investment. Some experts believe that the UK property market has been saved by foreign investors since the drama of the referendum. Others have suggested that many non-British people simply have more faith in the country than the British do. But however, it is interpreted there are still property opportunities to be found.