What do 700-year old castles, Harry Potter’s childhood home, and apartments with a first-class view of Tower Bridge have in common?
Each of these unique properties are actually listed for sale in the UK. And they couldn’t have come at a better time, as June’s Brexit vote has arguably given us one of the best opportunities to buy UK property in 30 years.
Here’s how. With the UK voting to leave the European Union, British leaders may have to renegotiate trade deals with more than 40 countries in just two years – a daunting task. The nail-biting uncertainty behind all of this has caused the British pound to plunge to its lowest levels since the 1980s, which has effectively made UK property at least 10% less expensive in terms of US dollars.
Many potential home buyers and investors see this as a rare opportunity to buy their dream home in the UK for a huge discount, and they’re right! Here are some of the best reasons why it may be a great time to buy a home (or a second home) across the pond.
1. The weaker pound means your dollars stretch 10% further since the June Brexit vote. The average UK home sells for around £206,000 according to top UK real estate agency Nationwide, which translated to almost $299,000 just before the Brexit vote when the pound was worth around $1.45. Now, with the pound trading at historic lows near $1.30, the average UK home costs roughly $268,000 – meaning you’d pay $31,000 less for a typical British home than you would have in mid-June.
2. London home prices may be receding for the first time in years, creating a rare value opportunity. London’s home prices have doubled since March 2009 due to a housing shortage in the highly-desirable area. But with Brexit uncertainty and new sales taxes dampening demand in the short-term, Nationwide expects house prices in prime central London to decline by 6% this year and remain flat in 2017. In fact, global real estate agency Knight Frank has already seen London’s highest-end neighborhood home prices fall as much as 9% over the past year. All of this gives you a great opportunity to get much more of Britain’s finest real estate for your money.
3. Homes across the broader UK could soon be “on sale” as well. For those who prefer the quieter and beautiful countryside of Wales or Scotland, Nationwide predicts that housing prices across the broader UK will slow to just 2.5% this year and shrink by 1% in 2017 due to economic risks and Brexit uncertainties. Keep in mind that UK home prices have increased more than 4% annually for the past three years according to Nationwide data.
4. Mortgage rates in the UK have fallen to record lows. The Bank of England has recently slashed its key interest rates to nearly zero in effort to jumpstart consumer buying. That’s led to the lowest UK mortgage rates on record, with the average two-year fixed mortgage rate falling to just 1.66% in August and the average five-year fixed mortgage rate at just 2.42%. (note: there are 30 year mortgages in the UK but typically only part is fixed, similar to hybrid mortgages in the US).
5. UK homes are just more extraordinary than US homes. Okay, so this one’s more of an opinion than a fact. But whether you’re looking to buy Harry Potter’s childhood house in Berkshire, the Hellifield Peel Castle home built in the 1300s in Yorkshire, or a London apartment with a world-class view of the Tower Bridge on the Thames River, it’s hard to deny the wonder and beauty of homes in the UK.
See some of the world’s most amazing estates for sale in the UK and Europe:
(Courtesy of our partner, Mansion Global)