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Best time to buy property in Central London since Brexit vote

Saleha Riaz
·3-min read
For international buyers, the potential for a Brexit deal is an increasingly important consideration, Knight Frank said. Photo: Getty Images
For international buyers, the potential for a Brexit deal is an increasingly important consideration, Knight Frank said. Photo: Getty Images

Estate agent Knight Frank analysed the size of currency discounts in the four and a half years since the Brexit vote, to show the exact day on which investors denominated in a range of currencies would have achieved the maximum discount for property in prime central London.

According to its findings, compared to the day before the EU referendum, a buyer denominated in Thai Baht would have benefitted from an effective discount of 39.1% if they had bought on 29 June 2020. That was the largest such discount of all the currencies analysed.

Chart: Knight Frank
Chart: Knight Frank

A buyer denominated in US dollars could take advantage of a discount of 32.5% if they had bought on 23 March this year.

It also found that discounts in excess of 30% have been available in a range of other overseas currencies, including the Euro, Swiss Franc and South African Rand.

The optimal timing for the transactions differ, with some currencies being stronger versus the pound several years ago, including the South African Rand and Russian Rouble.

The study noted that for the majority of currencies, the pandemic produced the biggest movement over the period, with the pound dropping to $1.15 against the US dollar on 23 March 2020.

Meanwhile, the South Korean Won has provided the most recent buying opportunity. “Indeed, the Won has strengthened since the end of October on the back of hopes for a COVID-19 vaccine,” the report said.

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READ MORE: UK house prices fall despite strong demand driven by second lockdown

It added that while international buyers have many factors to think about in the current climate, including travel restrictions and a 2% stamp duty surcharge in the UK from next April, the potential for a Brexit deal is an increasingly important consideration.

This is because “overseas buyers can expect a sudden change in the trajectory of the pound if a Brexit deal is reached.”

“There are strong echoes of the final months 2019, without the drama of a razor-thin parliamentary majority in London but with the added urgency of a global pandemic,” Knight Frank said.

It quoted Savvas Savouri, chief economist of hedge fund Toscafund, as saying that “any currency movement could be sudden, pointing to the dramatic impact the referendum result had in June 2016.”

UK house prices fell by 0.5% this month, despite aspects of renewed coronavirus restrictions driving strong demand and as sellers rush to beat the Stamp Duty deadline.

Property website, Rightmove (RMV.L) said that the average price of a property coming to market this month was down by £1,505 ($1,980) compared to last month.

The fact that, despite new coronavirus restrictions, activity in the housing market has been allowed to continue, has alleviated some uncertainty, which, in turn has slightly buoyed demand.

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