“This morning we agreed a sale of a house in Belgravia to an Italian client who is making in total a 12 per cent saving, partly due to the currency,” said Charles McDowell, a Chelsea-based estate agent.
“The currency meant he got an extra discount on top of a discount on the asking price.”
The buyer planned to convert the cash for the full cost of the house, about £18m, into sterling immediately to make the most of the decline of the pound against the euro following news early on Friday that the UK had voted to quit the EU, said Mr McDowell.
The pound dropped 5.8 per cent against the euro and 7.5 per cent against the dollar on Friday.
In Dubai, where the local currency is pegged to the dollar, a financial sector worker who asked not to be named said they were eyeing UK real estate on the expectation of falling prices. “I sense a buying opportunity,” the person said. “The threat to the British economy has been totally overblown.”
Dexters, a London estate agency with 60 offices including 28 in the centre of the capital, said it had agreed “several dozen” house purchases on Friday.
But estate agents in districts such as Kensington, Chelsea and Belgravia said they had also seen buyers pull out of purchases on worries over London’s future, while others were negotiating discounts in the expectation of a property slump.
Mr McDowell said two other transactions through his agency had fallen through because of the referendum, with buyers potentially seeking to renegotiate for lower prices. Other high-end agents said they were also seeing buyers pulling the plug.
Roarie Scarisbrick, a partner at the buying agency Property Vision, said: “My calls today have been 50:50 between clients putting their searches on hold and those stepping them up.”
“We had one client pull out of a £25m deal — an American who no longer wants to bring his family over to live in London,” said Charlie Ellingworth, co-founder of Property Vision. “He said, ‘this is not what I signed up for’.”
Hamptons International, an estate agency, said two buyers from continental Europe had raised their offers on homes in prime central London areas because currency movements would compensate for the increase.
“We have had some surprisingly upbeat news from our branches. There is clearly some bargain-hunting going on among people looking to take advantage of the currency change,” said Fionnuala Earley, residential research director at Hamptons.
Overseas buyers make up a significant proportion of those purchasing prime London homes, traditionally seen as haven assets. But demand has dropped over the past two years thanks to factors such as the slowdown in China and, closer to home, increases in UK stamp duty on expensive homes.
Liam Bailey, global head of residential research at Knight Frank, said the high-end housing market faced “a period of renewed uncertainty”, while Richard Donnell, research director at the analysis firm Hometrack, said: “Modest price falls now appear likely in higher value markets as prices adjust in the face of lower sales activity.”
