While the most unpopular candidates in history battle it out to become president, the collapse in sterling could provide an escape route for American buyers to purchase homes in the capital.
The cost of the average London house has fallen 9.2% for buyers from the United States in the last 12 months, according to analysis from estate agent, Stirling Ackroyd.
The collapse in the value of the pound, from $1.53 to $1.23 has made London property considerably cheaper for US buyers. This comes at a time when the U.S. electorate are about to choose between the two most unpopular Presidential Candidates in their history.
The latest ABC/Washington Post poll gives Donald Trump a favourability rating of -19 following allegations of sexual abuse, a string of offensive comments about women and minorities, as well as questions over his tax returns. Hillary Clinton’s favourability rating is now even lower than Trump’s at -22, following the FBI’s decision to re-open an investigation into her emails. While the polls give Hilary Clinton a narrow lead, both candidates appear to be extremely unpopular with American voters.
Many US citizens are contemplating emigrating. Earlier this year a Morning Consult/Vox poll of almost 2,000 registered voters revealed that 28% of Americans have at least considered leaving the United States if Trump is elected. After Trump’s success on Super Tuesday back in March, searches on Google for ‘how can I move to Canada’ increased by 350% according to Google’s data editor.
The recent decline in the cost of London homes may make it a more popular choice for Americans fearing the result of the Presidential Election. For buyers from the United States, properties in London are $62,000 cheaper than they were in October 2015 – This exceeds the median household income in the United States, $56,516 per year, according to the U.S. Census Bureau. The typical London homes is now worth $612,896.
In addition to lower house prices and the lower cost of living following the fall in the pound, London has other significant pull factors for Americans. With the same language, strong cultural ties and even regular NFL games at Wembley Stadium, London is a home from home for many Americans, with 61,000 US citizens already living here, according to DAUK figures.
Nick Davies, Head of Residential Development at Stirling Ackroyd comments: “For Americans left cursing Clinton or terrified of Trump, it’s worth considering a move to London. The recent fall in the value of the pound against the dollar means there are great deals available in the London market for buyers from across the Atlantic. While the Capital’s house prices have risen 13% year-on-year for domestic buyers, those using the dollar will find homes in London are almost 10% cheaper than a year ago. With the culture of the West End, thousands of years of history and fantastic employment opportunities, London has lots to offer US buyers, aside from a declining cost of living. And, of course, British winters aren’t as cold as Canada’s.”
Wall Street return may be costly for US investment bankers
Following the UK’s vote to leave to European Union, leading US investment banks have stated that they are considering moving jobs out of London. If these banks choose to move jobs back to the United States, the decline in the value of the pound will have the reverse effect. US bankers heading home will get far less for their money in competitive markets such as New York.
For bankers living close to the office, Stirling Ackroyd’s analysis reveals that the average asking price for a family home in the City and City fringes is £1.69m, up from £1.47m a year ago. However, in dollar terms, average asking prices of properties in the area have declined from $2.26m, to $2.07m over the last 12 months. When adjusted for the increase in property values in New York, a banker wishing to move to Wall Street has $267,000 less to spend on a property compared to October 2015. This is equivalent to the average annual salary and bonus of an investment banking associate at a leading Wall Street Bank.
Nick Davies, Head of Residential Development at Stirling Ackroyd comments: “While the most senior investment bankers will be able to absorb to costs of moving their job to Wall Street, those on lower incomes may struggle to maintain their standard of living. The fall in the value of the pound may persuade many working in financial services to search for a new job here and stay in London, despite the current uncertainty surrounding Britain’s exit from the European Union.”
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