"Brexit discount" makes London property cheaper for some

Mon Aug 15, 2016 10:10am EDT
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By Costas Pitas

LONDON Aug 15 (Reuters) - Price cuts of nearly 20 percent and a drop in the value of the pound have created "Brexit discount" bargains on some of the most expensive homes in central London -- if you have millions of pounds to spare.

The UK property market was one of the first sectors hit by uncertainty after Britons voted to leave the European Union on June 23, at one point forcing more than 18 billion pounds ($23 billion) worth of commercial property funds to be frozen.

Some wealthy foreign buyers saw an opportunity, however.

One Canadian buyer snapped up a seven-bedroom, five-bathroom home with a pool two weeks after the vote for 11.5 million pounds, a discount of around a third from its 14-million list price when combined with a drop in the pound of more than 10 percent.

The property, in sought-after Holland Park in west London, had been on the market for eight months, said Charles McDowell, a property consultant working for the buyer.

"They think they're getting a good house which is the most important thing and they also feel they are paying a discounted price, certainly discounted on what they'd be paying two years ago," he told Reuters.

Prices in prime central London had already started to fall in the run-up to the referendum, thanks partly to hikes in stamp duty tax on high-end property in December 2014 and on second home and buy-to-let properties in April, according to research from consultancy Knight Frank.

After the vote, in July, prices in prime central London -- from Holland Park and Knightsbridge in the west to the City of London in the east -- fell by 1.5 percent, the biggest fall in nearly seven years, it said.   Continued...