Falls in sterling 'present buying opportunity' for overseas property investors

The pound's post-Brexit plunge has sparked a surge in demand for luxury London homes from overseas buyers keen to snap up bargains, according to experts.

Building consultancy firm Arcadis has estimated that foreign investors are able to buy properties at a 10% discount thanks to the falls in sterling, which has tumbled to 31-year lows against the US dollar since the Brexit vote.

It said clients were already reporting a bounce in enquiries from overseas buyers after the referendum.

With prime London house prices expected to rise when the dust settles after the Brexit vote, these wealthy investors could see a £2 million investment now rise by as much as £250,000 in value, according to Arcadis.

Mark Cleverly, head of commercial development at Arcadis, said the trend would help provide a much-needed boost to the housing and construction sector as it grappled with the fall out of the referendum result.

He said: "For a market that, in some areas, has been stuttering for some time due to ongoing stamp duty hikes taking the steam out of buyer demand, the buying opportunity presented by recent events could be a big plus.

"More buyers means a more buoyant market which can only be good news for the industry."

The rise in foreign buyer interest offers comes amid mounting fears for UK property, with major funds suspending trading after investors rushed to pull out of the commercial sector.

M&G joined Aviva Investors and Standard Life in halting funds being withdrawn from their commercial property funds.

Housebuilders have also seen their shares come under pressure on the London market after a closely-watched industry survey signalled a shock contraction in the construction sector last month.

It was driven by a "steep decline" in house building and the first fall in commercial construction work since May 2013, according to the Markit/CIPS construction purchasing managers' index.

But Mr Cleverly said: "This influx of investment coming into the UK could boost British construction again in the future as well as giving a shot in the arm to the Treasury through increasing stamp duty receipts."