Property investors from the eurozone can buy in London at a discount worth thousands of euros because the EU referendum has depressed the relative value of sterling, which economists say would tumble further if there is a vote for Brexit on 23 June.
Stirling Ackroyd, a London-based estate agent, said the average house price in London is €33,200 lower — or £26,000 ($37,500) — if you are purchasing in euros than at its high point in November 2015. Sterling has fallen in value over concerns that Britain will vote to leave the EU in the referendum and several investment banks, including UBS and Goldman Sachs, predict the currency could lose as much as 20% in its relative value.
"If Britain votes to leave the EU, sterling is set to fall further so, ironically, London would become even more affordable – and therefore more attractive – to overseas buyers paying in euros," said Andrew Bridges, managing director of Stirling Ackroyd. "While eurozone buyers are propping up the temporarily soft market as prices stutter, Brexit might make Europeans much more significant players in London's property scene."
Similarly, dollar investors, whose currency has been buoyed by the US Federal Reserve's decision to hike interest rates, have enjoyed such large discounts against sterling that it has effectively cancelled out the effect of recent tax hikes on expensive and additional property.
According to London estate agent Douglas & Gordon, prices in the capital's western prime and emerging prime areas of the city — the most expensive — fell by 1.9%, on average, since June 2014. In US dollars, however, this is equivalent to an 18.5% drop in prices because of its strength against sterling.