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With the UK House market still in the doldrums, House vendors are looking out for indications of cheer and there is a perhaps unexpected uplifting effect on House Prices beginning to make itself felt.
The GB Pound is currently Fragile compared to most other currencies. Consider for example the Euro. Just a short time ago 100,000 euros would have translated into £70,000, hardly enough to buy you a modest terraced house in a reasonable area of the United Kingdom. But at the moment that same 100,000 euros would buy £86,000. And, because the prices of Property in the UK has fallen by about 20% at the same time; that £86,000 will now buy you much more than it would have 2 years ago. In a nutshell your €100,000 has climbed from an equivalent house buying power of £70,000 two years ago, to an equivalent £107,000 today, a 50% increase in purchasing power. However, these Purchasers are aware that they have to strike before the pound strengthens. That is great news if you need Sell House Fast, because it balances your bargaining position quite a lot. Of course, if I was Wanting to Sell my Home fast, I’d be sure to make sure it was well publicised abroad as well as at home.
This 2 way effect is luring overseas investors. These may be owners selling property abroad (assuming their local market is reasonable) and then repatriating back to the UK . They regard the present situation as a perfect time to return to the UK and actually gaining in capital base by doing so. Others are raising funds locally (abroad) and then bringing funds to the UK at these attractive exchange rates and entering the buy to let property market. Such investors can find that they are getting in the same rental income they would have had two years ago for only two thirds the investment. And provided they don’t convert the rental proceeds back to their native currency they do not suffer the penalty of selling a weak pound. They can retain income within the UK to fund further good value property investing.
Another kind of overseas buyer is the corporate investor or fund manager. There are signs that some pretty big funds are looking to come into the UK residential property market to snatch very good value Houses using very good value currency GB pound. Once again this plays on the double gain effect described above. Funds are being used to establish UK based rental portfolios or in a few cases to just trade in houses in the UK . It is believed that many such funds come from the far east, in particular China. Again, if you can reach these investors you’re likely to make a Quick House Sale at a sensible price.
All of this is a little, but positive, influence on the house market. By the ubiquitous effect of the rules of supply and demand; this can only have a positive effect on Prices . Most significantly it stimulates turnover and can unlock Property chains, so one investment purchase can lead to a number of onward sales and a further increase in turnover.