Brexit Bargains: A once-in-a-generation opportunity for investors

On Thursday 23rd June, the UK voted to leave the European Union. The referendum result has created uncertainty in the economy. The pound has fallen to a 31-year low. The result is a hotbed of media headlines and political confusion, but this is a once-in-a-generation opportunity for overseas investors.

The pound fell 8 per cent against the euro, in the immediate aftermath of the vote, and almost 10 per cent against the US dollar. As a result, it has become more expensive for Britons to travel overseas, but for foreign buyers and investors, sterling’s weakness means that UK real estate has just been given a huge discount.

“Properties are about 10 per cent cheaper now than they were just a month ago!” the sales team at property investment group Aspen Woolf tell TheMoveChannel.com.

“Overseas buyers are literally saving thousands of Pounds now on their property purchases. It’s a great time to benefit!”

“The fundamentals of the property market have not changed.”

“The short-term turbulence will present an opportunity – with a weaker Sterling providing a chance for overseas investors to purchase very competitively priced property in the UK,” agrees Stuart Johnson, Business Development Manager at Prime Centrum.

“With many Middle Eastern currencies linked to the US dollar the opportunity to invest in GBP denominated property assets is currently a once in a generation opportunity to buy at significant discounts,” he adds. “With the UK leaving the EU at some point in the future, the UK will be seeking to strengthen trade and investment ties more closely with other non-EU countries such as in the Middle East where great historical ties exist.”

While short-term affordability is a major bonus, what makes UK property such good value is the fact that the fundamentals that underpin the market remain the same: there are still not enough homes, which means that demand will continue to outweigh supply, the main driver of house price growth in recent years.

“For us the fundamentals of the property market have not changed. People still need a place to live, demand is outweighing supply and property prices are high. Combine these factors together and you have a great sector where clients can invest,” explains Christopher Whetstone, Managing Director at buy-to-let specialists Flambard Williams Limited.

“As long as supply and demand continue in the same fashion we will still see an increase in prices regardless of Brexit.”

“The overall lack of supply of property remains a fundamental factor that shows no sign of abating for many years and certainly this will not change whether the UK is in or out of the EU,” adds Prime Centrum’s Johnson.

“It is worth noting that after the Financial Crisis UK property performed better than UK shares indices and many residential property owners will be unwilling to sell during a period of uncertainty – further exacerbating the supply of property.”

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“Property in cities like Liverpool still boast excellent investment credentials.”

London is thought to be one of the cities that will be hardest hit by Brexit, but Johnson highlights regional cities as continuing areas of growth that will offer even better returns in the long-term.

“Property in cities like Liverpool still boast excellent investment credentials with the core fundamentals of a lack of available quality accommodation in the city centre, and a rental market boosted by a growing population of young professionals aspiring to city centre living, is here to stay,” continues Johnson.

“We have seen good investor interest from overseas on the back of the referendum result and many savvy investors also realise the above still holds true when looking at property in northern cities for investment.”

“The reality is still ‘business as usual’ for the majority of the UK following the referendum outcome and we believe the market will remain attractive,” comments a spokesperson from Select Property Group, which also highlights Manchester as another regional city expected to continue recording growth.

“Manchester, a city of young professionals, will continue to experience huge rental demand by students and generation Y alike, as well as a major lack of supply,” add the UK and overseas investment firm. “With 60 per cent more 25 to 29-year-olds than the UK average, these underlying demographic trends have driven demand for private rented accommodation, which have seen an 85 per cent growth over the last decade. This strong demand for private rented accommodation in Manchester coupled with insufficient supply is one of the key reasons we do not think prices will fall in the short-to-medium term.”

Away from the residential sector, Michael Reilly, Sales & Marketing Director at Select Portfolio, notes that the leisure industry is also “a great opportunity for property investors”.

“With sterling falling since Brexit, UK leisure is set to benefit as the staycation stays in vogue,” he comments. “Investors looking at leisure should continue to see the UK market as an attractive one, particularly for those projects with clear USP to attract both UK and international buyers.”

In the medium-term, the pound will also recover against other currencies, which will further boost the returns upon investments made while sterling is low.

With Theresa May now appointed as UK Prime Minister, Aspen Woolf notes that the pound has “already strengthened as the UK will undoubtedly start to stabilise in the coming months”.

The companies join many that have reported rising interest since the Brexit result from foreign investors. Knight Frank has seen month-on-month sales rise 29 per cent, while Homelink, one of China’s biggest agencies, Homelink, has seen enquiries surge by almost half.

“We’ve found that overseas enquiries have risen post-Brexit by about 32 per cent compared to same time last year,” add Aspen Woolf.

Brexit bargains are here: don’t miss your once-in-a-generation opportunity.

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