Exchange rates to provide for 5-7% savings in package costs; consultants forecast higher property purchases by Indians; currency depreciation to make education cheaper
Britain could emerge a favourite destination for Indian holidaymakers and property-hunters, as value of the British pound drops against the rupee.
The currency depreciation will also make education in British universities a lot cheaper. But, on the flip side, immigration laws could get tougher following Brexit, making it difficult for students to secure work visas after education.
The British pound fell 10 per cent against the rupee on Friday and was expected to fall further as markets remain volatile.
Naveen Chopra, founder and chairman of The Chopras, an overseas education consultant, said students would benefit from cheaper fees in the short term. “While students will have an advantage from a cost perspective, it will get tougher for those who have an ambition to work there and take up jobs. Student traffic to the UK from India is expected to drop further due to this,” said Chopra.
The number of Indian students opting for Britain has been on the decline. Between August 2014 and June 2015, 18,320 Indian students went to Britain while 22,385 Indians enrolled there in 2012-13, according to the Higher Education Statistics Agency of Britain.
On an average, fee for students in UK can range from pound 10,000 - pound 30,000 every year, depending on the course and the institute. This could see some temporary relief as long as the pound depreciates.
On travel front, tour operators said demand for trips to London could see a boost with a weakening pound. Last year, UKVI issued more than 450,000 visas to Indian citizens. Britain is both a stand-alone destination for Indians and also part of European package tours longer than 12 days.
"With the peak leisure season behind us, we don’t foresee very discernible impact of Brexit on global travel to UK, at least till the next summer. However, for those planning a vacation in the immediate future, the exchange rates are expected to provide for 5-7 per cent savings in package costs,” said Rakshit Desai, managing director of FCM Travel Solutions. Also, as the British summer is still going strong, any traveller planning an international trip in the near future must consider UK as a destination, Desai said.
A Makemytrip spokesperson said the development was new and was yet to unfold and thus it wouldn’t be ideal to speculate on this right now. “However, with the pound dropping, there is a possibility that we will see an increased number of travellers from India to UK and EU nations. The long-term impact on business travel and trade relations remains to be seen.”
Real estate is yet another area where there’s optimism. Consultants have started forecasting higher property purchases in the UK by Indians. With the latest developments, Indians who have been traditionally buying properties in UK were expected to buy more as realty rates come down, said property consultants.
“We expect that the combination of lower prices and devaluation of the pound would draw Indian investors looking to acquire assets in the UK,” said Shishir Baijal, chairman of India unit of UK-based property consultant Knight Frank.
Anuj Puri, chairman of property consultancy JLL India, compared the UK situation to the earlier recession in the US, when Indians took leading position among investors to take advantage of falling property prices.
Puri said high net-worth individuals (HNIs) with business interests or families in the UK would certainly keep a close watch on the effect of Brexit on UK property prices, and it was likely that many more Indians would invest there.
“Until today, 2016 was looking seemingly positive for the real estate sector in terms of investment inflows (read PE or FDI inflows). But now that is somewhat at risk,” he said.
Meanwhile, indications are that the real estate sector here would continue recovering on the back of a resilient Indian economy and strong capital inflows. “Brexit will not disturb that recovery much, as India’s office market leasing is dependent only by 5-7 per cent on UK-headquartered companies, and investments and activity of PE Funds from EU countries is more in India than in the UK,” he added.
