High-end brokers in central London have had one of their busiest days in a long time on Friday as a deluge of wealthy buyers look to scoop up bargains in the wake of the Brexit vote that sent the pound plummeting.
“There are a lot of reasons to buy in London now as opposed to yesterday,” said Trevor Abrahmsohn, managing director at Glentree International, who sells homes on Bishops Avenue in Hampstead — dubbed “Billionaires’ Row” as those are the only people that can afford to live there.
“Today is one of the busiest days we’ve had for a long time because the vote is out of the way and the world hasn’t ended,” Mr. Abrahmsohn told Mansion Global. “The uncertainty has been removed, which has boosted confidence among these buyers.”
In a surprise to many around the world, a Brexit was approved by a vote of 52% to 48%, battering the British pound and sending stocks tumbling on Friday. While this has presented problems for many, international buyers see it as an opportunity.
More:For Foreign Buyers, Times Are Getting Tougher
Mr. Abrahmsohn has predicted that prices in some of the most exclusive parts of London, such as Mayfair, could become 50% cheaper for dollar-backed buyers from the U.S., Iran, Russia and the Middle East among others than during their peak in 2014.
Galliard Homes, which has projects on 42 sites across London, including The Chilterns in Marylebone, has also received a flood of calls from potential investors on Friday, saying that if there are dropouts from any domestic private buyers, they wish to buy those units as they could get a discount.
“This decision to leave has opened up a Pandora’s Box as far as the London property market is concerned,” said Peter Wetherell, chief executive of Wetherell, a Mayfair-based broker. “This morning already sterling has plummeted to a low not seen since 1985 and this will now create a short-term buying opportunity for U.S. dollar and euro-based property investors.”
He added that for overseas buyers, this big and dramatic drop in the value of sterling will effectively offset the Stamp Duty and tax adjustments and it will make prime London property a lucrative investment for overseas investors bold enough to take a punt, despite the market uncertainty.
More: Expectations on U.K. House Price Growth Slips to Three-Year Low Ahead of Brexit Vote
However, brokers stressed that potential buyers aren't making any immediate decisions and are demanding house price forecasts to make sure any investment will be worthwhile.
“I’ve had calls from clients in the Middle East, Africa and the USA asking about the implications for the London market. Overseas buyers all want to know which way prices will go,” Simon Barry, head of new developments at Harrods Estates, the real estate arm of the famous eponymous department store in Knightsbridge, told Mansion Global.
“The world is watching the London market transfixed by the drama of this morning. The sharp fall in sterling will be seen by investors from around the world as a buying opportunity, which if followed by a much-needed moderation in prices, will kick-start a recovery fueled by domestic demand – assuming interest rates stabilize quickly.”
Mr. Barry said: “The big unknown is whether London will ultimately retain its status as a world financial and business capital outside the EU – we hope so and assume prices and confidence will recover from any setback. Investors will want to see what happens to prices over the next few weeks.”