South Africa may have glorious weather, beautiful scenery and more than 2,700 miles of coastline, but British expatriates and locals who hold British passports are deserting the country in droves. That is the view of the currency specialist Caxton FX, which has reported a 22 per cent increase in the number of South Africans repatriating funds to the UK in August and September. Year-on-year, the figures are even more striking.

“Over the past 12 months we have seen a 210 per cent increase in the number of clients moving funds out of the South African rand and back to the UK,” says James Hickman, of Caxton FX. “During turbulent times many investors look for stability and security.” For many people the decision to repatriate funds to the UK is because of political concerns over the future of South Africa, after the resignation of Thabo Mbeki as President in September. “We have seen a dramatic increase in South Africans with British passports seeking to emigrate to the UK, bringing their money with them,” Hickman says.

Robert Bailey, a property search agent in London, says that he has seen a significant increase in the number of clients coming to the UK from South Africa. “People are pessimistic about the situation there, especially when it comes to personal safety,” he says. “I have seen a lot of people deciding to sell up their holiday homes there, too.” But Bruce Borrie, head of the foreign exchange desk at Baydonhill, the exchange and overseas mortgages specialist, says that now is a terrible time to sell up and repatriate money from South Africa. “The rand is at multi-year lows and so the buying power from rand to sterling ... well, in a word there is none,” he says. Despite the pound weakening against the majority of currencies it has performed well against the rand. “Since the global economic slowdown began, the rand has been sold heavily, causing the currency to weaken from 13.21 against the pound in January to 19.19 in October,” Hickman says. “The rand has always been a volatile currency, but the recent economic downturn has hit it hard and it is likely to fall farther before it strengthens.”

The weakening of the South African currency is not bad news for everyone. “The pound is incredibly strong against the rand at the moment,” says Keith Stewart, the chairman of Pezula, the luxury property developer. “Now is a great time for Brits to buy in South Africa.” Pezula is selling 5,000 sq ft plots of land on its Private Estate development in Knysna, on the Garden Route, for R1.37 million (£90,000).

Despite several years of house-price inflation, South Africa remains very good value from a British purchaser's point of view, with the average two-bedroom property costing £45,000. And investors should see steady capital growth in their properties over the medium term, Stewart says. “South Africa is hosting the 2010 World Cup, which is sure to have knock-on effects on property prices.”

Case study

Jim Fitt, 65, a former officer with Revenue & Customs, and his wife, Carmilla, a former legal secretary, recently moved back to the UK from Cape Town to find themselves hit with a “triple whammy”. The lion's share of their savings was held in a Kaupthing Singer & Friedlander account on the Isle of Man, which was placed in provisional liquidation on October 9. Then they were gazundered - to the tune of £85,000 - on the sale of their flat in Essex. And because of the uncertainty over how much of their UK savings they will be able to recover, they have been forced to repatriate their funds from the sale of their Cape Town home at a poor rate.

“My original plan had been to live on a modest pension and my UK savings, then to bring back the South African money at a time that suited me, when there was a better rate,” Mr Fitt says. He took money out to South Africa when the pound was worth R11; when he made the transfer back recently, it was worth R17, meaning that he and his wife lost about £60,000.

The Fitts moved to South Africa five years ago, but returned home because of Mrs Fitt's poor health.

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