As pound slumps, cash-rich foreigners on the prowl for London homes

WITH the pound hitting new lows over the last fortnight, investors from the US, the Middle East and Asia are looking to take advantage of the UK’s financial crisis and snap up London residential properties, said analysts.

With mortgage rates surging and the pound in a slump, the UK’s residential property sector has become a two-tier market. In the first tier, local buyers who are mortgaged to the hilt are fearful that they won’t be able meet interest and capital repayments once their fixed mortgage deals end. Others who were previously keen to buy property can no longer afford to do so as banks want larger deposits and higher salaries to meet the jump in mortgage payments.

In the second tier are high-net-worth international buyers. They hold foreign currencies that have appreciated significantly against the pound – notably US, Hong Kong and Singapore dollars, Swiss francs, and the Chinese yuan – and are waiting on the sidelines to pick up some bargains.