Why UK could be a hot real estate destination for Indians after Brexit

By: | Updated: June 24, 2016 4:49 PM

United Kingdom (UK), including London, could become the favourite destination for Indian property buyers as Britain has voted to leave the European Union after a referendum.

Brexit to open opportunities for Indians to invest in real estate in UKLondon calling: Experts see it as a buying opportunity for the Indian realty investors as Brexit hints at an interest rate cut by the Bank of England and devaluation of the pound.(Photo courtesy: Knight Frank)

United Kingdom (UK), including London, could become the favourite destination for Indian property buyers as Britain has voted to leave the European Union after a referendum. Experts see it as a buying opportunity for the Indian realty investors as Brexit hints at an interest rate cut by the Bank of England and devaluation of the pound.

As the outcome of the referendum became clear, the British pound tumbled to over 31-year low that provides investors with an opportunity to acquire properties in the UK.

“One of the first outcomes of the result of the referendum is that the value of the pound and the stock market will fall in the near-term. We expect the Bank of England to go for an interest rate cut of 25 basis points at the Monetary Policy Committee’s meeting in July, or perhaps earlier if required. We may also see a return of quantitative easing, if there are signs that investment is deteriorating. This we see coinciding with a devaluation of the pound. The combination of lower prices and devaluation of the pound should draw in Indian investors looking to acquire assets in the UK. London has always been a favourite destination for Indian property buyers and it augurs well for the Indian investors to make their move now, ” Shishir Baijal, chairman and managing director, Knight Frank (India) Pvt. Ltd said.

UK – particularly cities like London – has always been a favourite among Indians in terms of realty investment, particularly HNIs. Brexit may give Indians an opportunity now to invest there, said experts.

“When economic recession hit the US, Indians took up a leading position among investors keen to take advantage of the falling property prices there. The British Pound is currently at a 31-year low, which itself provides an attractive rationale for foreign investors with an appetite to do so to acquire properties in the UK. There is no doubt that the UK – particularly cities like London – has always held a special attraction for Indians, particularly HNIs, with business interests or families there. Such individuals will certainly keep a close watch on the effect of Brexit on UK’s property prices, and it is very likely that many more Indians will seek to invest there,” Anuj Puri, chairman & country head, JLL India said.

For both residential and commercial property, there will be short-term market volatility. Potentially, and in selective instances, pricing could come under pressure.

The Indian real estate sector will not feel the ripples of Brexit as it is in recovering mode following resilient Indian economy and strong capital inflows.

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