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Will the crash in the Pound lead to an investment rush in student housing?

Will the crash in the Pound lead to an investment rush in student housing?

The Sterling hasn’t been having a good time recently, crashing through the floor most memorably just after the Brexit vote in June. Since then it’s sat at a 30 year low and has shown no signs of recovery. In contrast to this though the FTSE 100, the UK’s leading stock market, has been soaring and enjoying huge highs as investment pours in to the country’s top companies.

The contrast has been stark and has signalled a gold rush for foreign investors looking to capitalise on cheap exchange rates. It had been considered that given the climate this could be spun as a positive and that the currency shouldn’t be expected to drop any further.

Despite this, the Pound witnessed a dramatic plunge overnight on Thursday 6th October, dropping by a staggering 6% in a matter of minutes. Friday’s fall was the most aggressive since results of the Brexit vote emerged. Sterling recovered most of its losses and traded at $1.2456 against the dollar by 7:57 am but the sudden plunge left investors scratching their heads and trying to figure out what drove the ‘flash crash’.

The pound has been very sensitive to political disruption recently as fears over the consequences of a so called “hard Brexit” haunt investor attraction towards the currency. Theresa May, speaking at the Conservative party conference last week, hinted that the UK was moving towards a Brexit deal that could restrict its access to the European single market, but provide greater control over immigration levels.

Despite grabbing anxious headlines, the drop in Sterling has signalled a rush in to the UK for foreign investors keen on cashing in on the low exchange rates with some now reporting that the pound is worth less than the Euro in some bureau de change.

Property in particular has seen mass investment since the Brexit vote. With the rate of student property investments shooting up since the government lifted student caps, there has been significant investment there too.

It is likely that as the trend for boutique student property continues, so too will foreign investment into the market as yields hold strong and tenancy rates sit near the 100% mark. It has been a good few years for the student property market and all available evidence is showing that will continue for some time.