With weak dollar and subprime woe, Britons eye up US property

The confluence of a rapidly sinking dollar and tumbling house prices in America have produced a rare buying opportunity for British property investors looking to make a killing across The Pond.

The number of foreign nationals buying houses in the US increased markedly last year, according to the National Association of Realtors, an estate agents body based in Washington DC. And the figures are continuing to rise.

Buyers from Britain are among the most prolific, the study shows, coming in the top five with Mexico, India, China and Canada.

The NAR said more than 32% of its members reported sales to foreign nationals last year, more than any year on record, and that the numbers were on course for another increase in 2008.

"The falling value of the dollar against the euro and sterling is an obvious cause of this," said David Wyss, chief economist at Standard & Poor's in New York. "The falling value of property in many parts of the US is also an important factor."

Andrew Lowrey, a Cambridge-born veteran of the Falklands conflict, made a small fortune as a butler to the stars and Middle Eastern royalty. He now runs a staffing agency for the wealthy and is capitalising more than most on the increasing cheapness of American property.

"I have bought a Queen Anne property in Baltimore, Maryland for next to nothing that I am renovating right now," Lowrey says. He intends to convert the sprawling pile - that he picked up for a couple of hundred thousand pounds - into a training academy for his crew of butlers, housekeepers and estate managers.

Lowrey is also shopping around in New York, with his eye on several multimillion dollar condominiums."This is the time to buy," he says. "I bought my first house in the UK when I was very young and I've always been a believer in buying property. This market, with the dollar where it is and the property market doing badly, is a real time to buy."

Last month the NAR revealed that property prices are still slumping across the majority of cities in America as the subprime market collapse continues to drain the life out of residential sales.

The value of existing single-family homes in American cities fell 5.8% on average in the fourth quarter of 2007 compared with the same period in 2006.

Homes sales were worst in the west, where they tumbled 8.7%, the NAR said. Home prices in the south fell 5.4%, the country's second-sharpest decline.

The median existing single-family home price was down to $206,200 in the fourth quarter of last year compared with $219,000 during that same period in 2006.

The number of home sales was down in 46 of the 50 United States. Only South Dakota, home of the Mount Rushmore monument, rose a bit, North Dakota was unchanged while figures weren't available for the remaining states.

New York City is somewhat insulated from the national trend although the market is still soft. What is more, the influx of foreign buyers is helping to keep inventories of new developments churning. One new condominium complex with 120 units in the wealthy Gramercy Park neighbourhood of Manhattan has attracted more than 100 foreign buyers to purchase luxury digs in the past few months.

Jo-Anne Kennedy, chief operating officer with Coldwell Banker Hunt Kennedy, a high-end Manhattan estate agent, said that foreign buyers, particularly from the Middle East, Britain and Korea, were making up a bigger slice of her clientele.

"New York is one of the world's major cities," Kennedy said. "If it is too expensive to own a property in London, New York is an obvious place to buy, particularly with the market and the currency where they are."

Negatives still far outweigh the positives in every corner of the US market, from obscure bond trading down to residential housing. But, with more house hunters like Lowrey arriving on America's shores every week, injecting muchneeded capital little by little, it is only a matter of time before the real green shoots of recovery begin to emerge elsewhere.