With the UK facing a lot of uncertainty due to the energy bills rising , political changes and global recession, the GBP fell in the last quarter of 2023 being at its lowest value in decades.
For international investors however, this presents a great opportunity that should be utilised.
This makes NOW an excellent time to invest in the UK, as international investors are taking advantage of the exchange rates to maximise their investments. Investment in property is always a bankable option because of the markets relative stability compared to other more volatile assets.
The exchange rate of the pound at the time of writing is £1 = $1.24 This means a single US dollar is worth 81p. This rate has fallen considerably from the start of last year when the GBP was worth $1.35.
Russia’s invasion of Ukraine has had a major economic effect on the world due to it being a major source of energy. 40% of the EU’s gas comes from Russia so the sanctions placed have impacted energy prices in the UK.
Political unrest and rapidly changing economy policies have also contributed to the fall.
The government has tried to stop this trend in several ways, such as the Bank of England repeatedly increasing interest rates throughout the year to 3.5%.
All of the above factors have caused the Great Britain Pound to drop sharply to some of the lowest levels.
For international investors the various factors affecting the economic climate are perfect for investing in the UK housing market. They are in the best position to make the most of the current climate.
With the GBP falling, this means investing in USD BASED currencies will get you more for your money compared to in the past.
This means that you can invest less money compared to before the GBP began to fall, making UK investments BETWEEN 12-15% cheaper than usual.
This time will not last though as the UK’s political and economic instability calms down over time returning the GBP to its previous strength.
Unlike other sectors of the UK economy, the housing market has an excellent reputation for being stable thanks to UK property status as a physical asset, which sees growing value over time. The UK has also seen house prices rise at a very fast pace as supply issues have caused stratospheric demand.
Rentals have also been rising at a very fast rate, making buy-to-let a popular investment option. They offer a perfect mix of a monthly rental income to give you passive income, as well as capital appreciation increasing the value of properties over time.
Off plan developments have proven to be a great choice in the present climate, given their lower price point, flexible payment plans and future capital and rental yields. These can take longer to earn returns on, due to the time it takes to be constructed, so investing now means investors will save money compared to when the properties go on the market completed.