Pound sterling exchange rate

Falling pound: What the 37-year low means for UK property

There are myriad factors that affect the property investment landscape, and the falling pound is of particular interest to investors living abroad.

The value of pound sterling hit the headlines again last week, as it briefly dropped to its lowest level since 1985 against the dollar, at $1.135. This marked a 1% drop in value on Friday, although it has since recovered slightly to $1.14.

Part of this performance down-slide is due to a strengthening US dollar; however, it also dropped against the euro on the same day to €1.141 after a 0.5% fall. This marked a 17-year low in the pound’s performance against the euro.

Retail rates are one of the major influencers of the falling pound at the moment, and the latest figures from the Office for National Statistics revealed that consumer spending was down by more than anticipated in August, and retail sales volumes in Great Britain dropped by 1.6%.

The falling pound vs UK property

From a property investment perspective, some UK-based buyers will inevitably begin to feel the pinch due to the cost of living crisis, and rising energy prices. However, for investors based overseas, the falling pound is likely to provide added incentive to invest in UK property.

This is because those buying from abroad will find UK homes considerably cheaper than they are during times of strong sterling performance. Added to this is the fact that the UK housing market has continued to perform extremely strongly throughout recent adversity, creating further confidence in the sector.

Learning from history

One notable occasion when the value of the pound fell considerably was in the aftermath of the Brexit vote. One report in 2017 from investment platform Homegrown showed that foreign investors from Russia and South Africa were enjoying discounts on UK housing of around 21% compared to pre-referendum prices.

Meanwhile, those from the EU were on average able to realise discounts of around 16% on property in the UK as a result of the falling pound.

According to Homegrown’s founder at the time, Anthony Rushworth, the increased appetite from overseas buyers was an indication of “the incredible value that the UK property market still represents to armies of investors around the globe”.

Even while other parts of the economy retract, as can be seen from historical performance data, the country’s housing market can represent one of the most stable areas to invest with high levels of foreign demand.

British expats, too, became particularly keen to invest in UK property to make the most of the falling pound, according to the report – and this could also prove to be the case during the current low performance of the sterling.

Commenting on Homegrown’s report at the time, Aaron Strutt, director at Trinity Financial, said: “Many expats in particular earn very good money and their living costs are minimal, plus they often make tax savings.

“There is still a huge shortage of properties in the UK and while prices have dropped in the prime areas of London, other areas of the UK are looking more attractive.

“We have recently had calls from expats living in countries like Qatar and Dubai, and they were buying in London and the south-east. Others have bought further afield in Scotland and Devon.”

What’s the outlook?

The UK housing market continues to outperform many predictions, as appetite from buyers and investors remains strong amid low levels of supply in many parts of the country. While the falling pound is expected to recover, it makes the market a prime place for overseas investment in particular right now.

The latest data from the Office for National Statistics revealed that UK house prices jumped by 15.5% between July 2021 and July 2022, which was the highest yearly inflation rate in almost 20 years.

Commenting on what could be next for the property market, with the falling pound along with numerous other factors affecting performance, James Briggs, head of personal finance intermediary sales at specialist lender Together, believes the emergency budget will tell us a lot about what’s to come.

“With the challenging economic outlook and recession expected by the end of the year, household finances are continuing to come under pressure.

“Not only are first-time buyers at risk of being priced out of the market altogether, but renters are facing steeper rent and household bills this year; caught in a cycle of affordability and uncertainty.

“With an emergency budget set to take place in a couple of weeks, all eyes will be on Prime Minster Liz Truss to address the issues and challenges within the housing and mortgage market.”

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:


Sign up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
Manchester property investment


Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:


+44 (0) 333 123 0320

Open from 9am-6pm GMT


+852 6699 9008

Open from 9am-6pm HKT