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Brexit uncertainty an opportunity for overseas investors

A sharp drop in the UK currency means greater affordability for foreign buyers

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Super cars with a gold wrap finish are seen parked in a street in Knightsbridge in London on March 31, 2016. Photo: Reuters

Property investments in London are likely to attract more Hong Kong buyers as Britain decides whether to stay in the European union.

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The UK’s potential exit – termed Brexit – from the European Union has driven sterling to lows not seen since the financial crisis of 2008.

Britons vote June 23 on a referendum on whether to stay in or leave the 28-member group of nations which extends from Finland to Cyprus and Romania to Portugal.

Since 2008 the pound has lost almost a third of its value against the US dollar, recently buying US$1.41 (HK$10.94). The Bank of England also linked the Brexit uncertainty to the currency’s recent volatile movements in its latest policy meeting in March.

Nomura, Japan’s top investment bank, predicted that the British currency could fall a further 15 per cent in the event of a Brexit.

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Despite the pound’s instability, property prices in central and greater London are still rising, although the pace has slowed.

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