Overseas property buyers are snapping up London property after the shock decision for the UK to leave the EU, even as domestic buyers, spooked by uncertainty, pull out.
Estate agents in the UK have been swamped with calls from Chinese, Middle Eastern, Italian and Spanish buyers looking for a bargain after the pound tumbled to more than 30-year lows, making the exchange rate very favourable for foreign buyers.
Simon Barry, the head of new developments at Harrods Estates, said that in the 48 hours after the vote he received calls from clients in the Middle East, Africa and the USA asking about London property.
“The sharp fall in sterling will be seen by investors from around the world as a buying opportunity,” Mr Barry said.
There are no signs of the British property market “falling off the face of the earth” as some had feared it might if the UK voted to leave, according to Russell Quirk, founder and chief executive of eMoov.co.uk.
He said eMoov had a “very busy weekend” with a 50 per cent increase in the number of buyers from China and Singapore compared to a weekend earlier.
“It would seem that while a number of European buyers may be tentatively dipping their toe into post-EU property investment in Britain, those from further afield are looking to dive in head first and take advantage of the current indecision in the market due to a weaker pound,” Quirk said.
Buyers from the eurozone gained a €50,900 (£42,000) discount on the average London house price in the wake of the referendum result, according to Stirling Ackroyd, a London estate agent.
Agents said that the depreciation in sterling meant the average price of a house in London now equates to just €579,200 – compared to a record high of €630,100 in November 2015.
Some buyers closer to home did pull out of transactions.
Galliard Homes, London’s second largest house builder, said that one buyer exercised the get-out clause Galliard put in the contract to protect buyers if the UK left the EU.
The buyer was under contract to buy a flat in a scheme of 89 units in Slough but pulled out of the sale, Galliard said. The flat was taken by a professional investor on the waiting list.
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Employees of foreign banks in the City of London also pulled out of deals after the Brexit vote as the future of foreign workers in the UK was thrown into doubt.
Almost 40 per cent of London’s 8.66 million people were not born in the UK. In areas such as Mayfair and the West End, 55 per cent of the property market is based on non-EU buyers from the Middle East, India, Russia and Africa.
UK nationals who already own homes may be tempted to stay put rather than enter an uncertain market. A survey of more than 1,000 adults conducted after the results of the referendum showed that 23 per cent of homeowners aged between 18 and 34 said they were less likely to sell their home during the next three years.
The data from Plentific.com, a home improvement site, suggested that 12 per cent of the UK’s total 1.7 million homeowners were less likely to move in the next three years.