Sterling falls below $1.04 and international buyers take advantage
Sterling slumped towards historic lows as markets and investors expressed alarm about UK public finances. But the international buyers with US Dollars to spend are now looking to take advantage of significant currency discounts.
The exchange has fallen from $1.71 at the start of July 2014 to below $1.04 on 26 September 2022. If you also add an average fall in prices in prime central London of 13% over an 8-year period due to Brexit, tax hikes and Covid restrictions then you can really see surprisingly high levels of discounts especially in some of the most sought-after areas. For example, a buyer with USD in Knightsbridge, where prices are still 24% below their 2014 level, would have benefitted from an effective discount of 53% this week compared to July 2014. Buying a £5mn property in the area would have previously required $8.6m; that figure has now fallen to $4.06m. This could be a once in a lifetime opportunity!
Following the fall in the pound, some mortgage deals have been withdrawn by banks and building societies. Virgin Money and Skipton Building Society halted offers for new clients and Halifax said it would stop mortgages with product fees.