UK Property Market Offers Opportunities For Foreign Buyers
Tuesday, August 17, 2010

With supply now outstripping demand, now could be a good time for overseas buyers to look again at the UK property market, according to expatriate mortgage brokers Offshoreonline.org.

A combination of several factors including a stream of news suggesting prices have recovered to pre-dip levels in many parts of the country and the suspension of HIPS (home information packs) has brought about a 22% increase in the number of sellers, bringing over 30,000 new properties onto the market each week, a figure that is 45% up on July last year, according to Rightmove.co.uk. At the same time, Rightmove is reporting a softening of prices in their August survey, as the number of new sellers has risen for six consecutive months, whilst buying is traditionally quiet at this time of year.

At the same time, property site Zoopla.co.uk has noted that asking prices are now being reduced by an average of 6% compared to their first listing, as the balance between numbers of sellers and number of buyers continues to change. The UK Land Registry, which produces the most accurate survey of prices based on actual registered sales, is showing monthly prices rising by 0.1%, giving a UK national average rise of 8.4%. According to the Land Registry, London experienced an annual house price movement of 12.2% per cent in June. London’s house prices are now around the same levels they were three years ago.

London's monthly change of 0.5% is higher than last month's figure and brings the average house price there to GBP338,027, while the average for England and Wales is GBP166,072.

Commenting on the data, Offshoreonline.org managing director Tim Harvey said: “Although house prices fell on average by up to 25% - 30% in some areas between 2007 and 2009, much of the data now suggests that prices have recovered to within 5% or less of the pre–crash peak, showing the apparent resilience of this asset class. British expatriate buyers who are looking for a long term investment or a new family home should therefore be encouraged.”

At the same time, mortgage terms for Britons and other nationalities living abroad have continued to ease, with interest rates of 3.24% available for buyers with larger deposits. The number of lenders in the market looks set to rise too with at least two major organisations looking at plans to increase their expatriate mortgage books.

Harvey concludes: “Buyers need to be realistic – the housing market is not a one way bet and there is sure to be more turbulence along the way as domestic demand falters. However, in central London, for example, buyers come from all over the world, providing a useful cushion for when UK demand weakens. The recovery in the market and easier access to funds is important for expatriates, as it means expatriate buyers can now take steps to confirm mortgage facilities before they return to the UK, so they can move more quickly, should they find a property that matches their needs.”