Brexit means bargain-hunting for property investors, reveals new research from TheMoveChannel.com.
The international portal’s analysis of data from 2016 shows that international house-hunters were quick to adapt to the UK’s European Union referendum.
As Britain prepares to begin negotiations about its exit from the EU, sterling remains weaker against other currencies than it was before June 2016’s vote. As a result, British buyers have increasingly turned toward budget opportunities to achieve their dream of moving, retiring or vacationing overseas.
Enquiries for properties worth below £50,000 accounted for 82 per cent all enquiries on TheMoveChannel.com in 2016, up from 57 per cent in 2015. Enquiries in that price bracket jumped 14 per cent in the month following the EU referendum result, as buyers began to change their plans to counter the shifting currency exchange rates.
European destinations continued to provide those opportunities, thanks to record low mortgage rates and affordable prices. Indeed, Spain was the third most popular country among buyers in 2015, with 5.6 per cent of enquiries, ahead of Portugal (5.5 per cent), France (3.6 per cent) and Italy (3 per cent). The UAE, Germany and Canada also entered the Top 10 countries, while rising star the Philippines climbed to 11th, ahead of Brazil, India, Thailand and budget-buyer’s favourite, Bulgaria.
“‘Brexit means Brexit’ is the phrase we heard many times in 2016, but our research reveals that Brexit means bargains for investors, who demonstrated that they were willing to adapt to shifting conditions,” comments TheMoveChannel.com Director Dan Johnson. “British buyers accounted for a slightly lower share of traffic to TheMoveChannel.com in 2016 than 2015, but they remained the biggest single group throughout the year. Despite the weaker pound, low property prices, unprecedented mortgage rates and flexible sellers in Europe mean that bargains are still out there for investors and holiday home buyers.”
International investors were also quick to take advantage of the more favourable exchange rates, with UK property accounting for 47 per cent of all enquiries on TheMoveChannel.com in 2016, up from 45 per cent in 2015. Visits to TheMoveChannel.com became increasingly dominated by non-UK and non-US investors, with traffic from Chinese buyers notably rising 63 per cent year-on-year. Buyers from the UAE were also significant drivers of traffic.
The second defining event of 2016 was the US presidential election, which saw Donald Trump beat Hillary Clinton to the White House. As the President-elect prepares for his inauguration in 2017, the US dollar has strengthened against other currencies, bolstered by confidence in the country’s economy.
Again, buyers have adapted: visits to TheMoveChannel.com by US buyers jumped 18 per cent year-on-year in the two months following Donald Trump’s election, as the dollar’s strength made overseas property, particularly in the UK and Europe, more attractive.
“In many ways, the USA has been the star player for 2016, as investors have enjoyed the opportunity to snap up bargains in Europe, the UK and further afield at a more favourable exchange rate,” adds Dan Johnson. “International investors have responded in kind, as the USA’s economic confidence makes it an attractive, stable market: enquiries for US property jumped 14 per cent in Q4 2016 compared to Q3 2016.”
In keeping with the rise of buyers on a budget, apartments became increasingly popular in 2016, accounting for 55 per cent of all enquiries, up from 50 per cent in 2015. While interest in low-end property soared, though, enquiries for high-end property remained unchanged from 2015, accounting for 2 per cent of all enquiries.
“Bargains do not necessarily mean the cheapest properties on the market,” continues Dan Johnson, “and currency exchange rates are likely to continue fluctuating over the coming years, as Brexit negotiations unfold. As more opportunities open up in different countries, buyers have shown they are prepared to adapt to get maximum value for their money. 2016 is proof that regardless of the political climate, the property world keeps spinning.”