"The UK interest rate has dropped from 4,5% to 3% in the most dramatic cut in over 20 years. Effectively, on a £350k mortgage this equates to a monthly saving of £2,500. Traditionally, South Africans – including expatriates living in the UK and those who have family and friends there – have shown strong interest in the UK market, mainly in prime located central London property, which has consistently yielded sound returns," says Dr Andrew Golding, chief executive of the Pam Golding Property (PGP) group.
Simon Gibb, GM of PGP's International Division, says "this significant interest rate cut will provide relief to existing UK homeowners who already have mortgages".
"It is however unlikely to assist those who are unable to afford the sizeable deposit required in order to qualify for a mortgage. Ninety percent mortgages are a thing of the past and the number of different mortgage products available in the UK market has fallen nearly 80% during the past year.
"This is where South African investors have a distinct advantage – their offshore allowance enables them to make a sizeable deposit on a London apartment and as a result mortgage finance is attainable. With this marked drop in interest rates the rental income then affords a meaningful return on a UK property investment and rand hedge.
For more information contact Simon Gibb on 021 710 1700 or send an email.
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