Many expats from Harrow share the same story – they left for opportunities abroad, always intending to return within a few years. Whilst there are inevitably those who decide to stay in their new country, most are happy to eventually come home. Unfortunately, in 2022, it is harder than ever for expats to return to Harrow.
This is largely due to UK property prices which have been rising for the past ten years. A rise that has been further precipitated by COVID and its economic impacts. Now, expats who are selling their properties in a place like Spain, are finding it difficult to afford to buy properties back in the UK. This is in spite of it being cheaper to transfer money from Spain to the UK than ever before.
Why are housing prices in the UK rising so rapidly? And why is this particularly problematic for Harrow expats? Here’s what you need to know –
Harrow housing prices long before the pandemic, were rising at a faster rate than the rest of London. If you left Harrow over a decade ago, this might seem baffling. Harrow was never the most sought-after borough. Compared to the more fashionable parts of the city, Harrow was not considered particularly remarkable. To understand why Harrow housing prices rose, it is necessary to look at the context. London has been becoming more and more populated, leading to a severe shortage of housing in the most popular areas. This drove up the cost of housing in those areas, while ever more space was taken up.
Eventually, finding a tiny flat became difficult and unaffordable for most people. With space at an absolute premium in those areas, Harrow became a great alternative. While it’s away from the hustle-and-bustle of the city, it is not that far, and there is actually space for newcomers. Well, there was space for newcomers. Harrow’s popularity increased significantly, driving property prices up and ensuring that houses that hit the market were quickly snapped up. Harrow property became so hot that returning expats couldn’t find anywhere to live.
This led to an article published by Cameron Estate Agency five years ago investigating this trend. They told the story of a former Harrow resident who returned from Greece and ultimately needed the Council’s help just to find a place to stay.
The reality is that property prices in popular destinations for expats like the Coast of Spain did not keep up with London in general and came nowhere close to the increasing rates in Harrow. This was before the pandemic happened. Since then, the problem has only grown.
Rising Property Prices
At Home And Abroad At the start of the pandemic, many people expected a global property market crash. However, that did not come about. In most countries, the cost of housing began to rise at a more rapid rate than ever before. This was due to a number of factors, including low interest rates in many of the biggest economies, as well as a lack of supply.
Construction delays led to a lack of new properties throughout the world. Few people were selling their homes, as well. Prices started going up in the middle of 2020 and are still rising today.
But this is true just about everywhere. Expats from Harrow who were living on the Coast of Spain will have been able to sell their Spanish home for far more than its purchase price. In theory, this should balance out when those expats return to the UK. Transferring money from Spain to the UK is also cheaper than ever before. People who would have spent a lot of money on transfer fees when buying their home in Spain no longer have this problem in 2022.
For someone who has just sold property in Spain, it is extremely cheap to send money from Spain to the UK. Why is Harrow property still so much more expensive than property abroad?
Space Is At A Premium
We mentioned that five years ago, space was already at a premium, making it difficult for returning expats to find a place to live in Harrow. This has only become more of a problem, due to a number of factors. Before the pandemic, many expats were already returning. To a large degree, this had to do with Brexit.
Many people returned because they were anxious about their future abroad after Brexit. While there was no urgent reason for them to leave during the transition period, it seemed prudent to make plans to come home. The pandemic led to even more people returning home.
People lost their jobs abroad, and knew it would become impossible to stay on without a business to sponsor their working visas. Now, with so many people having returned to the UK, space is even more difficult to find. In Harrow, where this was already a huge concern, finding a home is extremely tough. Finding a home that is affordable for someone who has just sold a property abroad is almost impossible.
Expats who are determined to return and buy a home in Harrow may find that they have to downsize. Their expectations may be to buy a freestanding house, but they’ll find that a semi-detached home is beyond their budget.
The Future Of The Property Market
We are in extremely uncertain times in an economic sense in 2022. If the pandemic was not enough to throw global markets into turmoil, the consequences of Russia’s war on Ukraine have turned everything on its head. With markets crashing and the potential for a major recession, you may think that the property market will start to crash.
However, this currently seems unlikely. While the property market can be fickle, the lack of space makes it difficult to see supply meeting demand anytime soon. As such, UK property is unlikely to get cheaper, and may well continue to get stronger for the foreseeable future.
Expats returning to Harrow have a tough reality to deal with if they are to buy housing. We’ll have to wait and see whether this changes.