Foreign property investors demand new build property post-Brexit

Foreign investor demand for new build property post-Brexit

New home developments offer extra value

Brexit has been one of, if not the main focal point of recent news. Some market observers predicted a collapse in new build property prices. Here at Castlereach, we’ve witnessed an increase in interest in new home developments, especially from our large numbers of foreign property investors.

Here, I’ll explain what property investors are saying, and why so many believe the current environment is an strong “buy” opportunity.

New home developments and massive regeneration

There has been − and continues to be − massive regeneration investment projects across the UK. These include modern transportation and infrastructure builds. Projects such as Crossrail in London and High Speed Two linking the South to the North will slash journey times. Business will become easier to conduct, and the economy is expected to react positively and strengthen over time.

New build property developed near to such large scale new infrastructure benefits from easier travel and the influx of people wanting to take advantage of better transport links and more affordable house prices.

A strong economy underpins new home developments

Though there has been a shudder caused by the unexpected Brexit vote, our economy has good underlying strength. In a 2015 World Bank Survey, the UK was ranked as the sixth most business friendly country. The UK is widely recognised as being a good place to do business and start a business, with more than one in eight immigrants become entrepreneurs.

The Bank of England announced it could pump an extra £250 billion into the financial system, should it be needed. Post-Brexit, the Chancellor of the Exchequer, said tax rises and cuts in public spending would not be necessary to support the economy. The pound lost some value in the foreign exchange markets, but UK exporters are expected to benefit and sell more to target markets abroad. It’s also not alone and the Euro has been under scrutiny too.

The UK economy is in good shape, and it’s unlikely that medium to long-term demand for new build property will decline significantly, if at all.

Underlying demand for property will remain strong

With a strong underlying economy and commitment to infrastructure projects, demand for homes is not likely to collapse anytime soon. It’s estimated that there is an annual shortfall in supply of nearly 200,000 new build properties every year. Even if immigration were curtailed tomorrow (which we doubt will happen – immigration is good for the economy), domestic demand continues to outstrip supply.

New home developments will continue to benefit from this supply/demand dynamic.

The drop in the pound’s value gives foreign investors a worthwhile discount

The fall in the value of the pound since the Brexit vote is good for our foreign property investors. They’re looking for long-term investments in a strong economy. Infrastructure, regeneration, and underlying domestic demand is seen as underpinning property values. The fall in the pound may well be a temporary phenomenon. The short-term negative sentiment is likely to unwind as the Brexit shock dissipates.

The pound’s weakness presented a window of opportunity for our foreign investor clients to buy at a sizeable perceived discount to market value. It’s ironic when you think about one of the main reasons for the vote was to protect ourselves from an influx of migrants.

The future is bright for UK property and investors

Our clients are optimistic about the future for the UK market and new home developments. We agree with them. There’s a lot to be optimistic about.

Our bank of high net worth property investors come from around the world. Take advantage of their bullishness on the UK’s new build property market, and connect with buyers from Singapore, Hong Kong, the Middle East, India, and Australia. Contact us today on +44 207 923 5680 , and we’ll be happy to discuss how we can help you execute your new build property sales strategy and shift units in volume.

Live with passion and fun,

Brett Alegre-Wood

About the Author

Brett has over 20 years experience in all facets of property, he owns various companies centred around property and is the driving force behind the education and training at Castlereach. His companies have sold over £850 million in UK and London property and he manages over 1200 properties through his estate agency chain. Today he shares his time between UK, Australia and Singapore. He is married to Arlene and together they have 4 kids. Brett holds both the Level 3 Property Mark Qualifications for Property Sales and Property Lettings and Management.