How the fall of the British Pound can benefit investors

November 8, 2022

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  • The Pound been decreasing in value all year, but it reached its lowest plateau point in the middle of ex-prime minister Liz Truss’s time in office.

  • Since Rishi Sunak has been Prime Minister, the strength of the Pound has started to increase again, standing at £1 = $1.13 at the time of writing.

  • With the Pound being as low in value as it is compared to other currencies in the world, it presents the opportunity for people to get the most out of their investment.

The United Kingdom is currently recovering from a currency crisis, after the Pound reached its lowest ever valuation compared to the US Dollar. At the end of September 2022, the UK currency stood at £1 = $1.04. However, Liz Truss stepped down from her position as Prime Minister after only 45 days. Rishi Sunak was then sworn in on the 25th of October, and the currency has started its climb back to being significantly stronger than the American Dollar.

 

How has this happened?

The Pound been decreasing in value all year, but it reached its lowest point in the middle of ex-prime minister Liz Truss’s time in office. The Conservative Government’s policies and promise to lower taxes have resulted in higher amounts of government borrowing that has slowly but progressively weakened the United Kingdom’s economy.

The tax cuts mean that UK residents have more income left over to spend, increasing demand of goods and services, which in turn increased inflation. Energy, gas and petrol prices had already sky rocketed earlier this year due to the war between Russia and Ukraine, prior to the UK currency crisis.

 

What does this mean right now?

Since Rishi Sunak has been Prime Minister, the strength of the Pound has started to increase again, standing at £1 = $1.13 at the time of writing. The weakening of the Pound in general has caused a headache for many people in the UK with the cost of living crisis. The UK Government have even started giving out rebates to people to help them with their bills.

But in terms of property investment, it has brought on lower market prices for properties and rental growth for landlords. Before the pound begins to make its way back to the top, it is the perfect time to invest in UK property, particularly if you are an overseas investor, or have large amounts of cash in other currencies.

People should not be discouraged by the fall in strength of the pound, as the market is making a clear and major recovery from this year’s negative economic performance.

 

How can international investors benefit from this?

This is the perfect time for overseas investors to look into purchasing property in the UK. With the Pound being as low in value as it is compared to other currencies in the world, it presents the opportunity for people to get the most out of their investment.

It presents a chance for investors to get more for less essentially, as the exchange rates are not as daunting as they used to be. On top of all of this, our properties that have been exclusively allocated to us at NPG are for sale at up to 20% below the original market price. Therefore when you combine this with the savings due to the fall in pound, there are significant discounts on some very solid opportunities.

The prospect of capital appreciation in UK property investment has presented itself to overseas buyers, as the prices of these properties are sure to go back to their original prices as the economy improves. It could also exceed its value as the financial markets gradually gain strength.

With the cost of living increasing, rental prices inevitably increase, meaning too that landlord will earn more from their tenants once their properties are completed. 

 

Contact us

To learn about current property investment opportunities in Manchester, or to find out more about how property investment works, get in touch with the experts at North Property Group today.

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The Bailey

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