On the 23rd of June 2016, the great British people voted to leave the EU in one of the most historic political decisions of the last 70 years, but... how will 'Brexit' affect the UK's residential property market?
The simple truth is, no one knows the real long-term effects of the UK's decision to leave the EU. However, through the 'fog' of shock and hysteria following the result's announcement, we subscribe to the view that there is little to be concerned about with respect to the UK property market in the medium to long-term.
In the short-term, until there is considerably more clarity in terms of the political leadership that will guide the UK forward in respect of 'Brexit', the money/trading markets will continue to be somewhat volatile- but this volatility will likely settle as quickly as it occurred, once the EU exit strategy is clear. In addition, as any finality is highly unlikely to occur for at least another two years, the immediate effects will not be devastation of the residential property market- at worst, it might become mildly stagnant but quickly gain pace again once the Government issues the notice under Article 50.
The expected (albeit current minimal) additional drop in the value of the Pound, will continue to make investment into UK/London property more attractive to overseas investors, but there is no indication as to when that position will radically change.
This is generally thought to be highly unlikely (irrespective of the pre-vote rhetoric, now widely seen in retrospect as a scare tactic). Whilst some of the country's larger developers are either planning to, or already have, put certain new projects on hold, this means that the relative increase in demand will readjust prices upward to curtail the marginal drop in property values. Estimates for the 'short-term' with regards to price readjustment (particularly in the London market) range from 5%-10% [dependent upon which price bracket is scrutinised]. In short, the sales market may be comparatively stagnant in the short-term, but confidence should return once the country has a definitive 'way forward' from the Government.
Throughout the ongoing uncertainty that has been brought about by the UK's decision to leave the EU, Kings will continue to provide its clients with experience-based knowledge and the highest levels of customer service. Throughout many and varying states of political and economic changes, Kings, for over 50 years, has remained consistently strong as a brand, and will continue to do so for many years.