While lots of commentators are saying the Brexit vote will mean a spell of falling house prices, others disagree. There are a number of views and predictions of an immediate increase, in the London market at least, as overseas investors look to get more for their money while the pound is in free fall.
Ahead of the EU Referendum there were dire warnings abound over how much property prices could fall if Britons voted for Brexit. The Treasury stated there could be an up to 18% decline while others decried drops of greater or lesser levels.
Fast forward a little to a post-Brexit UK and what are the views on property prices now? Well, there are still plenty of economists, analysts and ‘experts’ predicting a decline in house prices. But, there are also a number of voices stating the ongoing lack of supply combined with the sharp drop in the value of the pound could actually make London property more attractive to foreign investors who may have been delaying their purchases ahead of the vote.
According to a report on Business Insider, property fund manager Prime Central Portfolio says London property will retain its safe haven status in the short-term at least. “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."
The safe haven status only works to exacerbate the benefits foreign investors will gain from the weaker pound, which suggests this is a real possibility – over the next few months or so.
Now the uncertainty that stifled the property market ahead of the EU referendum has been removed – even though it’s at the expense of a Brexit - auctioneer Cheffins are positive on UK property. “Both buyers and vendors waited to hear the referendum result, and now that we know we are leaving the EU, those who have sat on the fence will be returning to the market in their droves,” Martin Walshe, head of residential property at Cheffins told Property Wire.
And, even among those who expect the broader UK property market to stall and prices to fall, expectations are for current levels of activity in London to rise.
Central London Estate Agent Knight Frank says prices and transactions numbers could well fall in the wake of a Brexit, but there are caveats. Speaking to This is Money Knight Frank’s Grainne Gilmore said: “In the short to medium term, the fundamental demand and supply dynamics are unlikely to change with a continued undersupply of homes across the country underpinning pricing in some of the most desirable areas.”
One thing that is certain for the UK – housing market and pretty much every other market – is that uncertainty is set to prevail for some time.