Property experts have suggested that Britain’s shock decision to leave the EU in Thursday’s referendum could actually be good for the UK property market — at least in the short term.
Many estate agents think that the falling pound will result in a huge influx of foreign investors who are keen to take advantage of greater buying power.
Finally having an answer on a Brexit vote could also lessen the general uncertainty, which has already stagnated the high-end property market.
Chris Nelson, founding partner of Egg Homes, claimed that although he would have preferred a vote to remain in the EU, things could be even better in a few years:
He said: “Perhaps long-term, once new trade deals and agreements are put in place with individual European countries, which could take years, things should go back to normal and we could even be in a stronger position.”
London Central Portfolio was even more positive, saying that (emphasis ours) “prime central London real estate is expected to benefit from a flight to quality and the security of blue-chip tangible assets, against a background of highly volatile financial markets. It is now likely that property prices in Prime Central London will increase.“
Like many others, housing experts admit they have little idea what the long-term implications of a Brexit will be. But many seem to be optimistic the property market will stabilise once Britain’s place outside of the EU is more clear.
Knight Frank says: “In the short to medium-term, the fundamental demand and supply dynamics in the market are unlikely to change, with a continued structural under-supply of homes across the country, underpinning pricing in some of the most desirable and best-connected areas.”
It adds that a Brexit may even be largely irrelevant to long-term UK housing prices as investors don’t have many other choices (emphasis ours):
“Demand for prime London property rests on a wide range of drivers – most of which are unaffected by the referendum decision: the scale of London’s business cluster, depth of skills, education, lifestyle and language. It is not easy to identify an obvious alternative destination for investors despite short-term nervousness.“
There was, however, an expectation by Karl Zeller of BEWOCON that many investors may now be more tempted by German property acquisitions over the UK houses:
“From our standpoint, we expect to see an increased demand from overseas investors in Berlin property, who will be looking to avoid the UK during what will be a very uncertain period and invest in a secure and stable market elsewhere. With Germany currently the fourth largest economy in the world and the Berlin market offering strong returns, as well as a growing number of high-end developments in the pipeline, we could see a huge shift in power from the UK property market to Germany.”
Source: Business Insider, 2016, Full Article Here