With Boris Johnson’s resignation as Prime Minister, the UK economy could once again be in turmoil. But what does Boris Johnson’s resignation mean for Overseas investors including your existing and future investments?
Due to numerous economic disruptions, such as the Pandemic, Brexit, and Ukrainian War, to name a few, the value of the pound has been falling for the majority of this year.
Since the EU referendum in 2016, Brexit has had a large impact on property prices and yields in the UK. However, the UK property market has remained one of the strongest investment sectors in the world, with continuously rising house price costs and rental demand.
According to Forbes Advisor ‘the average UK property rose in price by 13% in the year to June 2022’ Russell Galley, Halifax Managing Director explained ‘Demand is still strong … while the stock of available properties for sale remains extremely low’.
With the potential for the value of the pound to drop and the demand for housing continuing to rise, The UK is growing even more appealing to foreign investors
If the Pound Drops – What Could This Means For Overseas Investors
If the Pound Drops your current investments could be worth more than they were, the value of any property you own in the UK—in Manchester, London, Liverpool, or elsewhere—would increase significantly.
Overseas Investors would have more purchasing power, and a lot of premium properties would now be seen as a more appealing investment. There would be a large opportunity for foreign investors to secure bargain-priced properties- if the pound depreciates.
A weaker pound means that through the exchange, your overall revenue will be larger when you start to take the returns on that investment
Have you recently Reserved?
If you have a property reserved and the pound drops, it would be the ideal time to exchange and secure the asset for a lower cost and a higher value
Investing in property in the UK has been an attractive investment strategy for overseas investors for many years. However, as of April 2021, a stamp duty surcharge of 2% was applied for overseas investors purchasing property in the UK. This was in addition to the previous 3% that applied due to investors already owning property elsewhere.
Despite the recent surcharge, buying UK property is still very profitable, and would be even more so as a result of a weaker pound; it might be seen as making up for the surcharge’s higher cost.
UK Investors – How Could This Impact You?
A weaker pound would lower the value of your property, but with a strategic investment plan, it should not have a significant negative impact on your equity. Currency movements are unpredictable and do have an impact on investments- but this should always be considered before making an investment decision.
You should make sure to set up long-term investments with long-term objectives that can withstand the test of currency fluctuations. Likewise, a diversified portfolio can also provide relief if the currency weakens. By building a strong portfolio with an experienced consultant, you can spread your money across different investment types and regions to protect and boost your returns.
Overall, Boris Johnson’s resignation and a change in the economy should impact your investment strategy. Overseas buyers, if the value of the pound drops, it would be an ideal time to invest in UK property to successfully maximise your returns,
For foreign investors looking for the best location in the UK, we have produced a free guide click here to download
UK investors- this is the time to review and consider your current investment strategy and ensure you are building a strong portfolio that can withstand economic shock. Investments with a guaranteed return or investments in various regions, like Dubai and Marbella- both available through Advantage Investment.
If there is drastic economic change, take advantage of lower-priced investments in the UK and this will increase your returns moving forward.
Contact us on 0151 433 9300 or [email protected] if you’re interested in speaking with one of our expert consultants now about your past, present, or future investments. Make strategic investment decisions today that will safeguard your financial future tomorrow.
