According to buy-to-let lender Skipton International, overseas interest in UK buy-to-let opportunities has increased this year.
The lender reports that enquiry values through its online mortgage calculator have risen by 43% year-on-year to the end of August 2019. In other words, the enquiry value for 2019 so far is, in fact, more than for the whole of 2018.
London and the South-East England appear to be the most popular locations, but demand across all regions, including Scotland, is strong. Roger Hughes, business development manager for Skipton International, said: “We believe many overseas residents are considering UK property good value at present, which is resulting in Skipton International receiving record levels of applications.”
Skipton added that the driving force behind the increasing interest from overseas buy-to-let investors is the devaluation of the pound since the Brexit vote which means the upfront cost of purchasing a UK property has been significantly reduced for those earning or with savings in a foreign currency. Right now, the UK buy-to-let property market presents a great opportunity for overseas investors.
Hughes explained: “On 10 June 2016 the exchange rate was $1.43 (USD) to the pound. Recently it touched $1.20 – a 16% reduction in the dollar amount required to fund a given amount of sterling.
“Once the property has been purchased, the rental income will be paid in sterling, which removes most of the currency risk in maintaining the UK mortgage.”
Buyer enquiries from overseas have seen a marked increase over the past six months. Around 20% of all the developer’s leads came from the Far East, it was reported by Click Properties, while 10% came from the US.
Anthony Moubarak, head of sales at Click, said: “The current weakness of the pound means that global currencies, not least of all the dollar, go much further making an investment in the UK good value for money. However, this isn’t simply a case of exchange rates.
“Whilst many domestic purchasers are adopting a ‘wait-and-see’ approach around the Brexit situation, savvy overseas investors view the political climate as an opportunity.”