Sterling Drop Seen Boosting Post-Brexit New Home Sales in LondonBy
Sales have increased since November, Ballymore’s Mulryan says
London market drawing more interest from mainland China
London’s housing market is being aided by a decline in sterling following the U.K.’s decision to exit the European Union, according to one of the biggest homebuilders in the city.
“September was one of the best Septembers in a number of years,” John Mulryan, U.K. managing director at the Ballymore Group, told reporters in Dublin on Thursday. “Sales have increased steadily since Brexit. We are seeing increased interest from mainland China, places like Malaysia, and that’s probably on the back of sterling.”
This week, sterling dropped to a 31-year low against the dollar this week and to the weakest level since 2011 versus the euro, making homes cheaper for overseas buyers. Ballymore’s average selling price at developments across the city, including Embassy Gardens near Battersea Power Station and Royal Wharf near the Canary Wharf financial district, is about 700,000 pounds ($887,000), Mulryan said.
Ballymore’s experience is at odds with some of the forecasts surrounding the London housing markets after the Brexit referendum. Values in the U.K. capital will drop by 1.25 percent next year because of uncertainty surrounding the terms of Britain’s exit from the EU, according to Countrywide Plc, the nation’s largest real estate broker.
Sales of London homes under construction dropped 34 percent in the second quarter, according to data compiled by researcher Molior London, as higher taxes for landlords and second home owners damped demand. Molior declined to comment.
Mulryan said he doesn’t expect any mass exodus of finance workers from London following the Brexit vote.