What Does the Weak UK Pound Mean for Overseas Investors?
If you’re an overseas investor who’s currently considering purchasing property in the UK, you might be questioning whether now is the right time. With such uncertainty surrounding the economy following the Covid-19 pandemic, many investors are being cautious about embarking on a new buy to let venture. The reality is, however, that there’s never been a better time to invest in the UK property market.
In the week beginning 16th March, the pound was reported to have plummeted to its lowest level against the dollar since the mid-1980s. The pound is now 4% lower than usual, opening up a lot of opportunity for investors who want to take advantage of discounted rates. So why has the UK sterling dropped so low, and what kind of property investments should overseas investors be considering in order to make the most of these US dollar vs pound fluctuations?
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Pound Latest News - Why Has the Pound Fallen?
In times of economic uncertainty, it’s common to see variations between the US dollar vs pound. The UK sterling began falling in the week of the March 16, following an announcement from the Bank of England that all interest rates would be slashed by 0.5 % to 0.25 %. It was on March 18 that the pound to dollar exchange rate was said to have collapsed.
The pound falling is certainly nothing new, although this is a much more significant drop than usual. Following the Brexit vote in June 2016, the GBP experienced one of its biggest drops in recent years. By August of the same year, however, the pounds latest news at the time showed that the sterling drop had recovered and the pound rose to £1.32 against the dollar. UK pound forecast predictions and past economic trends suggest that the GBP will recover once the Covid-19 pandemic calms down. This highlights the importance of acting fast in situations like these in order to reap the full benefit of current investment opportunities.
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I’m an Overseas Investor - What Property Should I Invest In?
As always, it’s important not to rush into the first investment opportunity you come across without first researching the UK market. Since the pound is currently low but expected to rise by the time Coronavirus has been resolved, the best move investors can make is to purchase properties in areas that are already displaying a high level of growth. This way, you will benefit from an even higher increase in capital appreciation.
According to recent market analysis, the North West region is the best area to focus on for strong capital growth. The region is expected to see property prices rise by 11.7% by the time we reach 2027, and has displayed some of the most significant growth levels over the last few years. This is no doubt thanks, in part, to ongoing regeneration seen across the region. Both Liverpool and Manchester boast some huge planned regeneration projects including Liverpool Waters and the redevelopment of the Anfield area.
If you’re looking to keep costs low on top of discounts resulting from the pounds drop, then Liverpool is a prime city to explore. Luxury properties are available to purchase from as little as £92,950 in Liverpool. Combined with impressive rental yields and high rental demand, Liverpool property investment opportunities are not to be missed by overseas investors currently looking into the UK market.
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Make the Most of the Sterling Drop With Our Buy-to-Let Opportunities
If you would like to enquire about our current Liverpool and Manchester property investment opportunities, please get in touch today. We can help you get more for your money by taking advantage of this once in a lifetime opportunity and benefit from significant returns.
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Disclaimer: This content was originally written in March 2020. It was updated in June 2023, but by the time you read it, some of the statistics used may have changed.
For the latest on the UK property market in 2024, take a look at our updated investment guides.