East Asian homebuyers cashed in on London new build price decline and a weaker pound
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London's Declining Property Prices Are Attractive For East Asian Homebuyers
Research by the new build snagging and defect management experts, BuildScan, has revealed how foreign buyers from some East Asian nations have cashed in across London’s new build market due to a pandemic decline in property prices, coupled with a weaker pound.
BuildScan analysed new build property prices across London and found that throughout 2020, Covid caused them to slump by -3.4%, falling to £488,371 in December compared to £505,331 in January of the same year.
However, BuildScan’s research has also revealed that fluctuating exchange rates during the pandemic added to the appeal of the London property market for many East Asian homebuyers.
Based on the average London new build price in December, South Korean homebuyers would have paid KRW 718,279,546, a -6.8% drop when compared to the average price paid at the start of the year.
Chinese buyers also saw a considerably higher discount when taking exchange rates into account. London new build homes fell by -6.2% over the course of the year, finishing 2020 at an average price of ¥4,293,807
Japanese buyers also saw a discount in excess of five per cent (-5.6%), paying an average of ¥68,104,814 in December compared to ¥72,175,963 in January.
But the change in exchange rates didn’t benefit every East Asian nation. During 2020, the pound strengthened when compared to the sing dollar, meaning that while a London new build was still more, this discount sat at just -2%.
Homebuyers from Thailand (-1.8%), Malaysia (-1.2%) and Hong Kong (-0.9%) also secured a smaller discount, while those from Indonesia were actually paying 2.2% more despite a drop in new build property values.
Interest In The London Property Market
Founder and Managing Director of BuildScan, Harry Yates, commented:
“Despite the problems posed by the pandemic, we’ve continued to see a high degree of interest in the London market from East Asia. This has been driven, in part, by factors such as BNO visa availability for those relocating from Hong Kong, as well as the opportunity to cash in on a stamp duty saving.
In addition to these draws, we’ve also seen fluctuating exchange rates boost the affordability of London new build homes which has also caused many savvy investors to act sooner rather than later.
Although the pound has rallied of late, the London market remains an area of focus for many foreign buyers and with market momentum returning at a slower rate than elsewhere around the UK, now remains a good time to invest.”
Table shows the average new build house price at the beginning and end of 2020 and the cost in each nation based on exchange rates at that time
| Location | Currency | Average new build house price - Jan 2020 | Ave exchange rate - Jan 2020 | New build house price in currency - Jan 2020 | Average new build house price - Dec 2020 | Ave exchange rate - Dec 2020 | New build house price in currency - Dec 2020 | Change % |
| South Korea | Won (KRW) | £505,331 | 1524.54 | KRW 770,397,762 | £488,371 | 1470.7659 | KRW 718,279,546 | -6.8% |
| China | Yuan (CNY) | £505,331 | 9.0542 | ¥4,575,371 | £488,371 | 8.7921 | ¥4,293,807 | -6.2% |
| Japan | Yen (JPY) | £505,331 | 142.829 | ¥72,175,963 | £488,371 | 139.453 | ¥68,104,814 | -5.6% |
| Singapore | Sing dollar (SGD) | £505,331 | 1.7663 | $892,567 | £488,371 | 1.7905 | $874,428 | -2.0% |
| Thailand | Baht (THB) | £505,331 | 39.775 | ฿20,099,552 | £488,371 | 40.415 | ฿19,737,518 | -1.8% |
| Malaysia | Ringgit (MYR) | £505,331 | 5.3324 | RM2,694,629 | £488,371 | 5.4524 | RM2,662,795 | -1.2% |
| Hong Kong | HK dollar (HKD) | £505,331 | 10.1641 | HK$5,136,238 | £488,371 | 10.42 | HK$5,088,827 | -0.9% |
| Indonesia | Rupiah (IDR) | £505,331 | 17937.5055 | Rp9,064,382,765 | £488,371 | 18969.3349 | Rp9,264,074,767 | 2.2% |
| London | Pounds (GBP) | £505,331 | N/A | £505,331 | £488,371 | N/A | £488,371 | -3.4% |
London new build house prices sourced from the UK House Price Index
Historic exchange rates in relation to house price data points sourced from exchangerates.org.uk
- Founder of HouseScan and BuildScan, Harry Yates, comes from a family background of construction and also holds a Construction Management degree.
- Having done the basics of the job for a number of years, Harry launched HouseScan four years ago, then started introducing his bespoke technology in 2020 to fulfil the snagging process properly.
- HouseScan is the new build snagging experts, using their knowledge, expertise and equipment to ensure your new home is as it was promised.
- HouseScan has been employed by thousands of customers buying new build homes from a wide range of different housebuilders.
- The HouseScan inspection and report is not only award-winning but more comprehensive than any of their competitors. HouseScan keeps up to date with all industry changes and regulations and they are also equipped with a range of equipment totalling over £4000 each.
- www.housescan.co.uk
- BuildScan is a multi-platform app that allows users to manage defects, snag lists, punch lists, surveys and project workflow in full synchronisation and with unlimited collaboration. Teams or individual users can manage entire projects through BuildScan, assigning and controlling tasks, workflow and much more for effective construction defect management.
- With BuildScan you can break your projects down into sites, plots and build stages for easy project management, log unlimited snags & defects straight into the BuildScan app, assign these defects as tasks to individuals & contractors within your team, manage and track progress throughout all stages of your project, create, manage & export snagging & inspection reports directly from the app.
- BuildScan launched on the 3rd November 2020.
- www.buildscan.co
