UK Property Losing Euro Buyer Cushion, Americans May Fill Void

UK property became very attractive to European buyers, when the Euro rapidly gained ground on our beleaguered UK currency.

Most of the attention was focused around London, which was overtaken by Monaco as the most expensive place to buy property. UK property values were among the fastest risers during the last boom, and Prime London properties rose faster than anything else. European buyers snapped up London properties in order to cash in on the next boom.

On top of the currency rates, the continual slide of UK house prices, and the record low interest rates also brought the European buyers to the UK on a property buying spree.

As the number of overseas buyers increased, new mortgage lending in the UK saw three consecutive months of growth. This however ended last month, when the latest BBA figures report a slight fall in UK mortgage lending. This then coincided with Sterling strengthening slightly against the Euro, from 1.07 to 1.11 where it has stayed since the first weeks of this month.

That doesn't seem like a lot, but it immediately put 4% back onto UK house prices from a European perspective, which is quite a lot in real money terms on properties worth over £1M. However, if the US Dollar continues to gain ground against Sterling as it currently is, it is likely that the next UK property buying spree will be that of wealthy Americans coming to snap up prime UK properties at bargain prices.