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Weakening Pound isn't Bad News for all of UK

By +Eric Jafari

Weakening pound is not bad newsAs the UK braces itself for further austerity measures in today's (March 20th) Budget, the Centre for Economics and Business Research (CEBR) has claimed that any further drop in the value of the pound will not be entirely bad news. In fact, London's property market could benefit from a devalued currency, as the city becomes more affordable for foreign buyers.

"The pound has weakened markedly since early January as the UK failed to achieve economic growth and a further tranche of  quantitative easing became ever more likely," the CEBR explained in a statement. "The weak pound probably pushed up house prices modestly in January. If the pound fails to recover lost ground, the weak currency has the potential to increase London prices throughout 2013."

For those considering selling their property, this is good news. With desire for real estate continuing to be high in the capital, property owners will be able to demand high prices, especially in prime locations.

However, the outlook isn't so bright in the rest of the UK and figures from the Office for National Statistics, released this morning, have shown that growth in house prices has begun to slow. Over the year to January 2013, the typical British home increased in value by 2.2 per cent. This is below the predicted rate of 2.4 per cent and represents an easing of the 3.3 per cent growth seen over the year to December 2012.

While London house prices now stand 8.5 per cent above their pre-crisis peak, rising 5.5 per cent over the year, Northern Ireland experienced a dramatic fall of 5.8 per cent. The south-east and north-west of England witnessed modest price gains of 1.2 per cent and 1.1 per cent respectively, while throughout the country the average rate of growth stood at 1.2 per cent. This is likely to change significantly after today's Budget, but it seems that London's property market will emerge victorious.

20 March 2013

Tags

Sterling,Budget 2013,London House Prices