Property Implications from BrexitJune 27, 2016
Following the outcome of last week’s EU Referendum there will undoubtedly be a period of uncertainty among home owners, buyers, investors, landlords and developers.
Many voices in the residential market still expect to see growth in the housing market. An interest rate cut by the Bank of England is now more likely than a rate rise in the short term, however there is not expected to be any changes at the Monetary Policy Committee’s 14 July meeting – rather August seems more likely at this stage.
While it is impossible to forecast the full implications of the Leave vote, the structural supply deficit in the UK’s property market may well prevent prices falling.
First time buyers may benefit from a delay in interest rates rises and potential lower prices, albeit there will be some hesitancy by occupiers, which is to be expected. Banks’ low appetite for risk is likely to shrink further, giving cash buyers a potential opportunity.
Overseas demand may increase on the back of the better value pound – for many overseas investors buying UK property just got a lot cheaper. There are also the inherent attractions of the UK, for example, timezone, market liquidity, language and stability.
Developer house builders are likely to proceed with caution, albeit they are likely to be least affected. Such caution looks likely to support prices in the short term.
This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our Property Department or Property Associate Patricia Cronin at email@example.com for further advice or information.