As Brexit continues to become inevitable, after all Theresa May’s Brexit Bill is already accepted, UK property prices are expected to plummet. That has however not deterred Asian investors from going on a buying spree.
This is an ironic twist to the shocking Brexit vote, with many who didn’t want to quit the European Union viewing it as a deterrent to foreign investors. But it seems the opposite is happening as many rush to take advantage of Britain’s economic opportunities.
Just a day after the iconic Thursday vote to exit the EU, Prime Minister David Cameron stepped down and down with him went the Sterling pound. Within hours, the pound hit a low of 8.8 percent compared to the dollar and analysts predicted that it would continue to weaken.
Property value was also expected to experience a low as reports began to emerge that buyers were withdrawing their offers as a result of market uncertainty.
But some foreign investors are not ready to follow the pessimistic masses and decide to strike deals when prices are low for a huge rip off in the near future.
Nicholas Brooke, chairman of professional property services for the Royal Institution of Chartered Surveyors, says that most of his opportunistic investors have been critical about such a decision and whether they should take advantage of the window in market.
Brooke’s firm entails offering advisory services to prospective buyers. He said that as much as some potential buyers are cautious of any action they take, their Hong Kong and Chinese counterparts appear ready to cast in their nets.
Property agent Knight Frank was supportive of Brooke’s assessment saying that as much foreign investors lack a clear picture of the Brexit impact, they may want to cash in at the declining pound since their buying power increases significantly.
The biggest interest emanates from China, Singapore and Hong Kong where lots of investors are known to prefer buying UK property. One reason for this could be because London prices are some of the highest in the world and are ever on the rise.
But with Brexit just at our door steps, international consultancy KPMG is of the opinion that the prices may fall as low as 5 percent nationwide and much higher within the capital.
International Monetary Fund warned that Britain’s economy is bound to sink to its lowest in 2018 with the overall economic output expected to be 5.6% lower than forecast previously. Unemployment is also expected to rise to over 6%.
But Number 10 will have none of that, claiming that the world will be quick to adapt to Britain’s flexible and diverse economy.
“The UK’s decision to leave the EU is an historic event and we should embrace this wholeheartedly,” said Robin Paterson.
His prediction is that the US and Asia will up their investment and strengthen the country’s property sector.
JLL, a property investment firm, conducted a research which showed of all the property transactions in the UK, 28% came from Asia. This is an increase from last year’s 17%.
Most Asia families continue to settle in London where they have stronger links with the city.
The preference could be due to the safety feeling associated with London.