Home Real Estate American homebuyers find UK bargains, discounted by a weaker pound

American homebuyers find UK bargains, discounted by a weaker pound

by Ozva Admin

Street in the Chelsea district, London

Alejandro Spatari | Moment | fake images

US homebuyers are hunting for bargains in the UK as a weaker pound contributes to double-digit price cuts.

The fall of the British currency, which is down 17.5% against the US dollar year to date, has made UK real estate cheaper for buyers paying in US dollars. Prices in London are down nearly 20% over the past year due to falling prices and the impact of the currency, according to real estate broker and advisory firm Knight Frank.

Real estate brokers and experts say the dips have created a rare investment opportunity for Americans to buy in the UK market, whether it’s a $400,000 pied-a-terre in London or a $30 million historic property in the countryside.

“We’ve seen a steady rise in Americans,” said Paddy Dring, Knight Frank’s global director of premium sales. “There are those who are moving forward with their plans and will use this opportunity for their longer-term investment plans to diversify abroad.”

Knight Frank said the combined price and currency declines have created an effective discount of 19% in the sought-after London neighborhood of Chelsea and 17% in Knightsbridge.

Compared to 2014, when the pound sterling was equal to $1.71 and London property prices were 13% higher, discounts are even higher, exceeding 50% in Chelsea, Knightsbridge and Notting Hill, according to Tom Bill, head of residential research at Knight Frank. The neighborhoods of Kensington and Mayfair have seen discounts of more than 45%.

A property listed at £5m in Knightsbridge, for example, would have cost $8.6m eight years ago, but today it costs $4m.

The savings are even greater on larger, more expensive properties. Steve Schwarzman, the billionaire CEO and chairman of Blackstone, has just bought a 2,500-acre historic estate in Wiltshire, some 90 miles west of London, for £80m. The fall in the British pound meant that he could have saved up to $20 million or more on the purchase compared to last year.

Dring said American buyers run the gamut: from older couples looking for smaller apartments, to families looking for studios for a son or daughter who attends school in the UK, to the ultra-rich looking for rare properties that are good long-term investments.

“We don’t see a lot of pure speculation,” he said. “Buyers are generally motivated by business, education or lifestyle.”

But housing supply across the country is tight, especially for historic estates, Dring said.

However, for those with money, the savings can be substantial. Brokerage Savills has just listed one of the UK’s most historic properties: a 1,922-acre property in the English countryside called Adlington Hall. The property encompasses six farms, more than 20 residential buildings, an event space, and a town hall. It was once owned by the British crown and has been in the same family for over 700 years.

The sale price: 30 million pounds, or about $33 million at current exchange rates. That marks a savings of more than $6 million for US shoppers, paying in dollars, compared to a year ago.

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