After much speculation about whether the UK would remain or leave the EU, and all the understandable uncertainty that this has created, these have been interesting times for anybody interested in property; whether home owners, buyers, sellers or investors. There have been more than a few warnings about the effects of a Brexit on housing markets however, now that the decision has been made, let’s reflect on the facts objectively and acknowledge the positives.
Firstly, with the drop in the value of the pound, the UK has instantly become an excellent investment opportunity. On this note, Robin Paterson, joint Chairman of Sotheby’s International Realty, said the property market “should embrace this wholeheartedly.”
“We may have fewer European investors in the coming months”, said Robin, “but we believe there will be significant inward investment from Asia, as well as from the US. Buyers from these regions will undoubtedly be looking to snap up bricks and mortar in the UK with the predicted fall in sterling.”
Furthermore, property investment firm London Central Portfolio Limited (LCP) predicts price rises in the capital’s prime neighbourhoods, and having originally thought this wouldn't occur until 2017 claims “the signs are that the re-entry of investors into the market will be more rapid than originally expected.”
Some commentators have noted that with some of the uncertainty having been lifted from the housing market because of the referendum result, buyers who needed to move would now re-emerge and begin their searches. Nobody knows the impact that the UK’s exit will have on the rest of the EU. If other member states also decide to leave, how might that affect the UK? Well, there is every reason to think that it may provoke movement of wealthy British ex-pats back to the UK along with global investors wanting to settle in the capital.
While many are saying that house prices may drop, the head of housing at KPMG UK, Jan Crosby, has commented that any impact on prices would depend on the house builders’ reaction saying “we are most likely to see a drop in growth in asking prices rather than pricing which will change less.”
Lettings markets may be in for a boost in at least one respect. Multi-national employers are unlikely to make any rash decisions, choosing to monitor the economic situation for some time first. That means more overseas employees being more likely to rent rather than committing to the purchase of a home.
Finally, we have witnessed financial reassurances from both Mark Carney of the Bank of England and Chancellor George Osborne who have both announced positive and strong measures.
The absolute truth is that nobody knows for sure what the future holds and there are still plenty more reasons for uncertainty - the resignation of the Prime Minister and ensuing leadership contest, probable general election - however with change comes opportunity.
Hunters Estate Agents are experts in the industry so if you want to know more about how you will be affected, we are happy to help.