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Anyone know any oversea buyers ?

Are their mortgages in local currency or GBP?

Are they now in for a double whammy in London when prices correct and the £ aint buying very many Yen/Sing Dollars etc ?

 

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Impossible to say, but I expect it would be in their  local currency (100% certain if it from the EU) due to unacceptable risks of foreign currency loans making them impossible to obtain.

Mind you, I though the majority were cash buyers.

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UK people will be paying rents in GBP, so those will be taking a large dip when any foreign landlords swap them to their own currency.

Also applies to ex-pats living on rental income from a property in the UK. 

 

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Foreigners either pay cash, or a large deposit exchanged at time of purchase. The balance will be loaned in ££ paid to the seller be a sterling liability and converted to currency 2 each month. So 500 pounds transferred to euro dollar etc. So they effectively got a price cut, as mentioned before rent will also go Down. Cassh buyers have been hit hardest as their mansion in London is worth 15% less in their local currency.

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For those with mortgages in local currency, the value of the asset their mortgage is secured on has plunged.

Triple dose of bad news for those who bought in central London at the top in 2014.

1) the property has fallen in sterling terms 2) the new value is a lot less when translated into their currency 3) higher taxes mean there are fewer buyers ready to take it off their hands

Even worse if they were counting on the rental income

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The Chinese renminbi/yuan got accepted into the SDR basket on October 1st as the fifth global reserve currency with a weighting of 10.92%, part of the long march to full convertibility. Five days later, GBP is sold off hard. Coincidence? I suspect the two events are related.

Given that CNY/GBP has been broadly flat since 2009, and that the current spike will all most certainly be reversed by the Chinese govt in the interests of its manufacturing exporters, it seems reasonable to assume that Chinese investors in UK property have not been unduly inconvenienced by Brexit. Moreover, they are unlikely to be inconvenienced by the exchange rate until the yuan is allowed to float free.

 

Edited by zugzwang

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UK must look cheap again to Euro buyers.

About as cheap as it was before the Swiss removed their peg.

Everyone on that there telly seems to have forgotten that this is where Sterling was 2 years ago.

Yessir....

Dollar? Well im just glad i bought the nice USA made tube Microphones when i did.

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5 hours ago, Patient London FTB said:

For those with mortgages in local currency, the value of the asset their mortgage is secured on has plunged.

Triple dose of bad news for those who bought in central London at the top in 2014.

1) the property has fallen in sterling terms 2) the new value is a lot less when translated into their currency 3) higher taxes mean there are fewer buyers ready to take it off their hands

Even worse if they were counting on the rental income

 

When you lay out the risk like that, I'm amazed that small time investors would bother. Transaction, Translation, economic, political risk. Unless I was a cash buyer I wouldn't have the balls.

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9 hours ago, shindigger said:

UK must look cheap again to Euro buyers.

About as cheap as it was before the Swiss removed their peg.

Everyone on that there telly seems to have forgotten that this is where Sterling was 2 years ago.

Yessir....

Dollar? Well im just glad i bought the nice USA made tube Microphones when i did.

No no no. UK property is still a rip-off. Just because a currency falls why are houses cheap?. After Brexit ALL foreign nationals including EU citizens will NOT have the right to live in the UK. As rents are in £ the only reason is for capital gains. Unlikley will £ continuing to fall and bubble bursting. The myth peddled by EA regarding more buyers due to falling £ is false - cant believe some on here  sucked into the BS

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7 hours ago, 999house said:

 

When you lay out the risk like that, I'm amazed that small time investors would bother. Transaction, Translation, economic, political risk. Unless I was a cash buyer I wouldn't have the balls.

Well, supposedly the risk of investment for many is actually of asset appropriation by their state.  Property in the UK is nice and safe from that point of view.  For many of these investors a loss of 20% is just the price of safety.

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12 minutes ago, dgul said:

Well, supposedly the risk of investment for many is actually of asset appropriation by their state.  Property in the UK is nice and safe from that point of view.  For many of these investors a loss of 20% is just the price of safety.

Germany would be a better bet though. Less tax on rents, no mega-bubble like UK, no CGT after 4 years. 

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1 minute ago, Gribble said:

Germany would be a better bet though. Less tax on rents, no mega-bubble like UK, no CGT after 4 years. 

Sorry wrong key - meant after 5 years

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13 minutes ago, Gribble said:

Germany would be a better bet though. Less tax on rents, no mega-bubble like UK, no CGT after 4 years. 

But German property hasn't just gone on a 10% discount to the ($) price 6 months ago.

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1 minute ago, dgul said:

But German property hasn't just gone on a 10% discount to the ($) price 6 months ago.

? Not sure what you are trying to say???? If you are talking about falling £ it is irrelevant - see my above comment. Rents on UK property will have fallen correspondingly and if as a foreigner you have no right to live you will only be reliant on capital gains

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2 hours ago, Gribble said:

 After Brexit ALL foreign nationals including EU citizens will NOT have the right to live in the UK.

Again, we're a bit short of statistics. Or, a breakdown by nationality. There was a figure the other day . . . 72% of London commercial property transactions by foreign investors. A recent docu showed even houses in Aldgate East being bought by Chinese investors.

This has been a pattern for years. The pound has been lower, even in the time intervening since 2008, yet London prices have risen 42%. I don't think the 'flash crash' or Brexit makes much difference. London property is perceived as a safe haven . . . until it isn't.

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2 hours ago, Gribble said:

? Not sure what you are trying to say???? If you are talking about falling £ it is irrelevant - see my above comment. Rents on UK property will have fallen correspondingly and if as a foreigner you have no right to live you will only be reliant on capital gains

You're thinking like an 'investor' - you look to find a place where you can put your money so that you get a decent return.  In those terms you'd be mad to invest in London property (say).

But what it your investment strategy is about shielding your assets such that others can't get to them?  London property works quite well in that context.  Maybe you're comparing property in several countries as a place to hide your cash -- all of a sudden London will look better value.

Note that there is plenty of evidence that London property is used as a store of wealth for all sorts of undesirables (Oligarchs, crime lords, corrupt officials) -- they even keep apartments empty and unused, rather than risk rent them out.

 

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On 10/7/2016 at 5:29 AM, TheCountOfNowhere said:

Anyone know any oversea buyers ?

Are their mortgages in local currency or GBP?

Are they now in for a double whammy in London when prices correct and the £ aint buying very many Yen/Sing Dollars etc ?

 

 

I'm an overseas buyer.  Bought in one country, now live in another.

 

And yes, the fact that Oz has no extra tax on non residents did help swing the equation.  Whereas in HK, with their foreigner tax, I never considered buying.

 

But - for those people I know in HK and SG who have bought in London, all have local bank mortgages in SGD or HKD.  Off plan all except one (bought a house for her daughter to live in whilst studying).

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Easy really......let them buy but do what many other countries all over the world do charge them non resident tax based on the valuation of the property and from an income as if they were renting it out, whether they do or not still chargeable.;)

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