Over the last few months there has been constant talk of Brexit and how this might impact the UK property market and in particular the London property market. Well, today is the day that Theresa May actually invokes Article 50 and begins the UK process of withdrawal from the European Union. So, what does this mean for the London property market?
Differing opinions
There are many articles today covering the news and views of everybody in the property market. As you might guess, views differ right across the board but what exactly are people saying about Brexit and its impact on the London property market?
We have taken a snapshot of predictions from property experts that include suggestions:-
The property market would become more stable
Number of house sales will rise across the UK
Interest rates won’t rise
Property price growth will slow
Demand for homes will outweigh effects of any uncertainty
Londoners are likely to be the most cautious
Prime central London property will remain relatively unaffected
International buyers will invest in the prime central property market
It will depend upon your personal view about Brexit and the forthcoming divorce from the European Union but at this moment in time all of the above predictions could turn out to be true. The reality is that nobody has a clue how the ongoing discussions will end and whether the UK will retain access to the single market or become a global force outside of the European Union.
Sterling up but FTSE 100 down
Sterling has rebounded slightly in currency markets ahead of the formal meeting to discuss the UK departure from the European Union. This makes a change from the last few weeks when sterling has been under significant pressure. The exact opposite has occurred with the FTSE 100 share index having performed admirably since the Brexit vote last year with currency considerations increasing the profits of many FTSE 100 companies. As the currency has rebounded slightly this morning, and there is now real uncertainty, it was no surprise to see the FTSE 100 share index fall.
Property investors continue along their way
At this moment in time there has been no real marked reduction in domestic and international interest in UK property. Indeed, because of the currency considerations, UK property now looks extremely attractive to many overseas investors. Overseas investors have been very visible over the last few months helping to support markets during these uncertain times.
If you talk to the experts in UK property very few are seriously concerned about the short to medium term outlook. If the European Union had been a stronger bond of countries then perhaps there would be more the media concern but the fact is in the eyes of many people the European Union needs head to toe reform. So, the fact that the UK is now about to exit the European Union could take off the straitjacket of international trade and help the UK reform its economy.
Conclusion
The simple fact is that nobody really knows how Brexit will impact the UK economy, UK property market and indeed their European counterparts. In many ways the European Union has more to lose than the UK has to gain because the UK has for many years now acquired more goods and services from Europe than it has provided. While the politicians on mainland Europe can huff and puff about this and that the simple fact is they will need to accommodate the UK in some shape or form.