Brexit to hit London Realty soon
- 5th Jul 2016
The pounds need not to be sole victim - at least in the short term- from the Brexit vote. London property market too can come in for some heavy volatility as it adjusts to life without the European Union.
A weakening pound - it only debris to be seen how low it will fill in this immediate spiral- also creates opportunities for purchaser.
If the labile scenario pans out, there could be bargain possibilities for Middle East investors’ intent on taking positions in UK realty. This will be more so for off-plan planned that were to be market to Middle East investors once the June 23 referendum was over. Of course the planners’ behind them had been hoping for a vote that would have confirmed UK’s position within the EU……and not an outlet.
We haven’t as of now, made any changes to our plans to start marketing our latest plan in the UAE next week, said a senior marketing manager with the UK planner. But given the uncertainty that’s been cast on the markets and point of view, we could decide to postpone it. We will know over this weekend.
Other planners too were uncertain about committing to their near-term plans until all the votes are counted and reappraisals done internally.
Company Sources, however insist that London historic status as a safe haven for the global investor will still remain intact. More of with Gulf Investors.
With a pound in relative free fall, it will make the acquiring costs a compelling bargain for investors from dollar-sect or dollar –pegged jurisdictions, said a London-Based Broker. With the current off-plan launches their planners need not drop the prices- it will still be a bargain for dollar purchaser.
In the first half of the year purchasing the activity in the UK land, especially London, had been subdued compared with the last 48 months. But more than Brexit fears, the imposition of higher impost on costly lands acquired by overseas investors was the reason behind the dip in matter.
In terms of assets, residential transactions were affected more than the big ticket commercial deals,ungilding those backed by foreign purchaser.
But, now with Brexit a reality, it’s unlikely there will be a positive impact via money flows in to UK real estate, said Sameer Lakhani, Managing Director of Global Capital Partners. There could be a few bargains hunters trying to capitalize on short-term trades.
But there is no longer term structuralderivation that led to the awakening of the UK economy.
Financialization- the trend of incremental debt derivation into an assets class over the last decade has now caused the markets to soften.it will remain so as long as there is no coordinated economic response to counter this trend.