By Harry Scherzer, Actuary and CEO of Future Forex
From Cape Town’s tech-driven property boom to high-yield rental pockets in up-and-coming urban centres, South Africa offers strategic opportunities for buyers looking to stretch their pounds and tap into a dynamic, globally connected market.
South Africa might not be at the top of the list for British buyers investing overseas, but perhaps it should be. A favourable exchange rate, lower entry costs than the UK and a less onerous tax regime are making it an increasingly attractive option. And while the lifestyle perks – think ocean-view living, bush escapes and weekends in the winelands – are a major draw, the financial upside catches the eye.
The rand has weakened significantly over the past 20 years, boosting the pound’s buying power in real terms. In the early 2000s, £1 bought around R15. By 2015, it was trading at R22 and today it’s closer to R24.23 – a 61.5% increase since 2005. For sterling-based investors, that translates into greater purchasing power and the ability to secure far more property for their money than ever before.
High returns in a maturing market
With the average South African home priced at around R1.6 million (roughly £68,000), the market presents a rare opportunity for foreign buyers to enter at a relatively low threshold. Even in Cape Town – the most expensive city in South Africa – the average price sits at R3.5 million, well within reach for many UK buyers seeking a second home or investment property.
Cape Town continues to outperform the rest of the country, buoyed by strong domestic migration, international demand and a growing tech economy. Over the past decade, property values in the city have increased by 160%, with annual growth hitting 8.5% in June 2025 – far above the national average of 5.2%. Neighbourhoods like the Atlantic Seaboard and City Bowl have registered double-digit annual gains.
International buyers are a major part of this surge. In the first five months of 2025, Cape Town recorded more than R1 billion in foreign-funded property sales, driven largely by British, German, and Dutch investors seeking secure, amenity-rich developments that offer both lifestyle appeal and long-term resale value.
At the same time, cities like Johannesburg, Durban and Pretoria offer great value, particularly in well-situated districts benefiting from urban regeneration and increasing rental demand.
Smooth process, smarter transfers
The buying process in South Africa is transparent and relatively simple. Foreigners can own residential property outright, although ownership doesn’t confer residency. Separate visa applications are required for those intending to relocate. Mortgages are available to non-residents, but typically require a 50% deposit and Reserve Bank approval.
Buyers must comply with anti-money laundering (FICA) regulations, including proof of identity, address and source of funds. A local conveyancing attorney is essential, as properties are typically sold voetstoots (“as is”) and require proper due diligence.
Transfer duty – South Africa’s equivalent of stamp duty – applies to purchases above R1.21 million. For example, a R5 million property attracts around R350,000 in transfer duty. In contrast, a property of similar value in the UK (about £206,000) would fall below the current £250,000 threshold, meaning no stamp duty is payable. Bond registration and legal fees are additional, though buying off-plan can reduce upfront costs, as new developments are exempt from transfer duty.
For UK-based buyers, managing international money transfers efficiently is key to unlocking full value. Using a specialist currency partner, rather than relying on high-street banks, can result in significantly better exchange rates and lower fees on large transactions. That difference could easily equate to tens of thousands of rands in savings, directly increasing the amount available for your purchase. The benefits go beyond cost savings – choosing the right provider means less admin, faster turnaround times, and white-glove support from start to finish.
Strategic upside with lifestyle perks
South Africa’s appeal goes well beyond affordability. Inflation is stabilising, interest rates are softening and the coalition government formed in 2024 has helped restore a measure of political confidence. While structural challenges persist – including power supply and infrastructure concerns – the overall outlook is improving.
Cape Town, in particular, stands out as a destination that offers resilience, lifestyle and solid returns. With top-end homes commanding around R31,000/m² and buyer demand showing no signs of slowing, the window for value may not stay open for long.
For UK investors looking to diversify abroad while capitalising on the clear currency advantage, South Africa offers more than a scenic escape.
