Overseas buyers are saving more than £40,000 on London property prices thanks to Brexit, according to estate agency Stirling Ackroyd.
In a statement released on Friday afternoon, after the pound slumped more than seven per cent against the euro following the UK's vote to leave the EU, the firm said the effective price cut for buyers from eurozone countries had reached eight per cent.
Seven months ago, the average London property was the equivalent of a record €630,100, its figures show. That now stands at €579,200, following a slow down at the top end of the market and the slump in the pound.
At current prices, the €50,300 equates to a slide in pound terms of £42,265. Taking into account the depreciation in the pound, euro buyers would now pay £40,900 less, Stirling Ackroyd says
Managing director Andrew Bridges said the fall to some extent masked a drop of around 2.4 per cent for prices in the top 25 per cent of the London market, but that it still equated to a major incentive for overseas buyers.
"Overnight, London has become a more affordable global property hotspot, particularly for those paying in Euros," he said. “After the shock of the referendum, calm will return to the market and people will see the bright lights of London are undimmed."
Predictions of a rush of foreign bargain-hunters is a counterweight to a string of forecasts that house price growth will significantly soften – or even head into reverse – after the referendum result says estate agents such as Chestertons and property developers such as Galliard Homes had seen buyers pull out of sales on Friday after the Leave win was confirmed.
Gareth Norris, a Sussex-based mortgage broker with Lyons Finance, said two clients had cancelled their purchases since the referendum.
"One client said they weren’t going to go ahead because they were worried about negative equity. The other one said they were going to postpone because they wanted to be in a more stable position before committing," he said.
References: http://www.theweek.co.uk/brexit/61987/will-house-prices-rise-in-a-brexit-bubble
http://www.ft.com