Falling pound opens door for ex-pats to land city property

A GROWING number of ex-pats and foreign buyers are looking to take advantage of a double whammy of falling prices and the weak pound by buying property in the Capital.

Agents say they are receiving an increasing number of inquiries from people based outside the UK about buying properties in the city as investments.

New research shows the cost of buying a home with euros has declined by 22 per cent over a time when the price it costs in pounds is only three per cent lower.

Experts hope that foreign-based buyers could help re-ignite the property market in the same way as they did in the last property downturn in the early 1990s. Simon Rettie, managing director of estate agent Rettie & Co, said an analysis of people registering their intentions to buy in Edinburgh showed significant growth on last year.

"If you are paying in euros and you want a property in Edinburgh this is a great time to do it.

"There are a lot of ex-pats in places like the Far East who are all paid in dollars, as they are in the Middle East.

"They have dollars and they are looking at prices and saying that this is a great time to get back to Scotland.

"We saw this in the 1990s. When the recovery started then it was those people from the Far East, particularly ex-pats, who bought and stimulated growth."

The research, carried out by Rettie, showed that a property valued at 500,000 in January 2006 would have set back a European investor 725,950. It would then have increased further to a high of more than 850,000 in September 2007.

However, the declining value of the pound, and the strengthening of the euro, means that the property would now cost 568,248. The price in pounds has only fallen to 486,639.

At Leslie Deans & Co, two German investors are looking to spend several million pounds on property in Edinburgh. Other clients currently looking for property include a South African resident and buyers from across Europe.

Senior partner Leslie Deans said: "They are convinced there is excellent value here and the exchange rate is magnificent.

"We are seeing a recognition of the value of property as an investment. That type of buyer will look to the middle to top-end, such as the good streets in the New Town.

"If you have 100,000 in the bank now, what interest do you get? Next to nothing. You could also take it and put it in the stock market but are you brave enough? I wouldn't be. People are seeing property as a safe and solid investment in the longer term, and exchange rates are helping them look here."