Benefit NOW: Exchange Rates and Rental Market Increase

Property News of The Month

This month, we’re seeing a lot of positive news for overseas investors when it comes to exchange rates, in addition to the mortgage rate saga affecting both first-time UK buyers and investors, albeit in different ways. Another question we are being asked by a number of our clients this month is the predicted 10% fall, which we delve into in this article. 

We take a look at the property news you need to know for October, and what the reality of the market really looks like. If you would like to learn more about the topics we have discussed below, make sure you watch our latest webinar, where we delve into the news in more detail, and what the reality of each pressing topic really entails.

How The Weakened Pound Can Benefit Overseas Property Investors

The pound temporarily hit an all-time low against the US dollar of $1.035 at the end of September. This was partly on the back of concerns about the new chancellor Kwasi Kwarteng’s recent ‘mini budget’, but follows the political uncertainty after the resignation of former prime minister Boris Johnson. However, the weak pound in conjunction with the high demand for property in the UK has created a perfect storm for foreign investors. 

For example, a 35% deposit in USD on a typical £250,000 investment property was approximately $124,250 in June 2021. Today that is $100,625 – a saving of circa 20%.

When we take a look at why the currency has dropped, we of course need to look at the ‘mini budget’ in more detail, as we have cut taxes costing the UK economy this year in the region of £49bn. This caused the pound to drop, as the world’s financial community has lost confidence in the UK economy.

FW Recommends: This exchange rate not only makes property cheaper for international investors but means that returns on their investments will be stronger, making now the perfect time to invest in UK property. Providing you are educated and informed, investors worldwide are able to generate fantastic double-digit returns. 

Whether you are looking to add to your existing portfolio or would like to start your property investment journey, then this is the perfect time. International investors are encouraged to make the most of the falling GBP by investing their money now, in order to maximise the returns they will make on their investment by the time the pound recovers from this unstable period.

We have both ready and off-plan properties available in all of the major cities in the UK. Discover our latest Property of The Month and invest for as little as £149,000 to generate a fantastic 10% NET return.


Rental Market on The Rise

The number of banks offering 95% mortgages for first-time buyers has dramatically decreased, making it harder for the younger generation to get onto the property ladder. Whilst this isn’t good for first-time buyers as they will need to find a larger deposit or decrease their buying power, it will cause the rental market to increase further. This is because the likelihood of them doing this is slim, as they are most likely just going to continue to rent, putting more downward pressure on the rental market, causing a further lack of supply.

FW Recommends: Those that are renting will continue to do so, due to the mortgage rate increase in conjunction with the 95% mortgage decrease. This means that for investors, now is a great time to benefit from the lack of supply and pressure on the rental market, as we predict this will be the case many face for the longer term.


10% Falls Predicted: Will it Really Happen?

Experts predict 10% falls in house prices over the next two years as mortgage providers continue to pull deals and raise interest payments. Whilst this could potentially happen, the big question is, what if it doesn’t? Everyone was predicting falls during Brexit and COVID, yet they didn’t – could this be the same again? 

FW Recommends: If you purchase something now, then we have to make sure that we generate 5% + income each year to combat any potential falls or if we are purchasing off-plan, we purchase 10% BMV, so again, we have mitigated any potential fall.

 

Overall, despite the news that is currently circulating, we’re remaining really positive when it comes to investing in property. Like we always say, there’s never a perfect time to invest in property, but there is a good time, which we believe is now for so many investors around the globe. Whether you’re looking to reach early retirement, are saving for your children’s university funds, or would simply like to earn more from your money, property investment remains a fantastic way to reach your goals.

For more information, or to discuss your property requirements, contact us now. One of our brokers will be happy to offer no-obligation advice and assistance at a time convenient to you.

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