'Brexit discount' makes London property cheaper
Price cuts of nearly 20 percent and a drop in the value of the pound have created "Brexit discount" bargains on some of the most expensive homes in central London - if you have millions of dollars to spare.
The UK property market was one of the first sectors hit by uncertainty after Britons voted to leave the European Union on June 23, at one point forcing more than $23 billion worth of commercial property funds to be frozen.
Some wealthy foreign buyers saw an opportunity, however.
One Canadian buyer snapped up a seven-bedroom, five-bathroom home with a pool two weeks after the vote for $12.9 million, a discount of around a third from its $18-million list price when combined with a drop in the pound of more than 10 percent.
The property, in sought-after Holland Park in west London, had been on the market for eight months, said Charles McDowell, a property consultant working for the buyer.
"They think they're getting a good house which is the most important thing and they also feel they are paying a discounted price, certainly discounted on what they'd be paying two years ago," he said.
After the vote, in July, prices in prime central London fell by 1.5 percent, the biggest fall in nearly seven years, it said.
"Since the vote, a number of buyers have requested discounts due to the climate of political and economic uncertainty," said Tom Bill, Knight Frank's head of London Residential Research.
Uncertainty is poison
With little official data yet published covering the period since the vote, there are divergent views on how Brexit will impact the economy, ranging from recession to a boost for exporters, retailers and hotels due to the fall in the pound.
London house prices rose nearly 14 percent in the year to May, according to the latest official data in July.
However, asking prices fell by a monthly 1.2 percent nationwide between July 10 and Aug 6, according to a survey by property website Rightmove published on Monday, with London recording the biggest drop with prices down 2.6 percent.
"Uncertainty is generally poison to markets so you're going to see people beginning to wait and see what comes out of it," Chief Economist Fionnuala Earley said.
London-focused estate agency Foxtons blamed a 10 percent drop in both the number of homes it sold and let in the first half of the year firmly on Brexit.
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