More Singaporeans looking at travelling to, buying property in the UK as pound falters

SINGAPORE - More Singaporeans are looking into buying property in the United Kingdom and travelling there following the news of the historic weakening of the British pound against the US dollar.

Owing to the pound's weakening, one property agent said she has received an uptick in inquiries in recent days to buy property market in central London and in the UK.

Realtor Benham & Reeves regional director Doris Tan said: "The pound now is very weak so it is a buying opportunity for Singaporeans. It's a buyer's market now."

She added that for those who were looking to sell their property in the UK, they would have to consider if their rental income over the years is able to offset the losses from changing it back to Singapore dollars.

"For some, they have already profited from making these long-term investments so even if they sell their property and cash out their earnings, this drop in the pound might not affect them as much as those who have acquired a property more recently," she said.

Mrs Tan has been helping Singaporeans acquire property in the UK and overseas for over three decades.

On Monday (Sept 26), the sterling dropped as much as 4.9 per cent to an all-time low of US$1.0327 (S$1.48) before stabilising at around US$1.05405.

As at Friday press time, the sterling had risen to US$1.1135. A year ago in September 2021, the pound was valued at US$1.34289.

Ms Lavinia Rajaram, Asia head of public relations at travel booking website Expedia Group, said searches for flights to the UK on the website rose 15 per cent over the weekend from Sept 23 to 25, compared with the seven days before that.

She added: "London has remained a popular destination for Singapore travellers and has ranked in the top 10 most booked city in the first half of 2022.

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"A drop in exchange rates can spark travel interest and consideration to destinations where it is advantageous for the Singapore dollar."

For music teacher Eugenia Yip, the drop in the value of the pound means she can explore better options for a holiday with her mother to London that she is planning for next June.

The 33-year-old said: "We were initially looking to stay in Airbnbs to save some money, but I think since its cheaper now, we might look to stay in hotels instead.

"Staying in a hotel offers more assurance and comfort especially since I'll be travelling with my mother who is in her 60s."

However, Ms Yip said she was hesitant to purchase the pound in large quantities ahead of her trip.

She added: "I might change just half the amount I am budgeting for my trip for now in case the pound falls further.

"In any case, we might not do as much shopping in London even though the pound dropped as we are heading to Paris and apparently some of the luxury items are cheaper there."

But Mr Martin Rimmer and Mr Mark Buchan, co-founders of the Singapore-based professional services network Spice Advisory, called for caution from Singaporeans looking to make big-ticket purchases such as properties.

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"There might be those who see this as an opportunity to take the plunge into buying a property in central London, but these are people who have already done their homework and for whom the pound weakening just represents better value for a decision they were already planning for," Mr Rimmer said.

Mr Buchan added: "There are other sorts of taxes that will be applied when buying a property in the UK such as inheritance tax and capital gains tax, which do not offset the benefits of a better exchange rate now.

"Interest rates have also increased in the UK and globally, and will continue to do so which means borrowing is also going to be more expensive."

Still, if one already owns a property, then paying off the debt will be cheaper now, he said, adding that those planning to go for a holiday there will benefit from the better rate at the money changers now.

This article was first published in The Straits Times. Permission required for reproduction.