We may have voted to leave the EU, but the UK is still open for business in Europe, and remains an outward looking, and open and generous society, as emphasised by key Leave campaigners. This morning George Osborne spoke authoritatively to reassure markets, saying that we are in a ‘position of strength’ economically and reiterating Mark Carney’s comments about the preparations made by the government and the Bank of England for this outcome.
There will undoubtedly be short term economic impacts. The markets are volatile, the pound has weakened and the interest rate outlook is uncertain. We may see reduced transaction levels in the housing market, at least until there is more clarity about our new situation within Europe, notably our new trade deals.
Anne Currell, Group CEO, remains optimistic about the longer term; “We are confident that trading levels in the property market will recover, even if there is a short term stand-off due to the uncertainty in the immediate future. We are open for business as usual and are aware that Brexit will present opportunities as well as challenges.”Head of Research Nicola Almond says fundamentals remain sound, and some sectors of the market will benefit from Brexit; “Whilst the Brexit vote may dampen sentiment in the short term, longer term prospects for the property market remain good. The market is underpinned by a persistent imbalance in supply and demand, especially in London and the South East. Despite the uncertainty, interest rates are still expected to remain low, and whether rates fall (to zero) or rise, any changes are likely to be incremental, and mortgages are likely to become cheaper if rates fall.”
“In the short term we expect a weaker pound to attract overseas investors, making UK purchases cheaper and more than offsetting recent stamp duty increases. We also expect some sectors of the property market to benefit from Brexit. Key prime markets in central London, which have recently been under-performing, may see renewed interest from overseas buyers whilst sterling remains under pressure. We also expect an increased focus on capital appreciation, leading to buyers targeting areas where property prices are expected to outperform. These include undervalued east London boroughs, such as Newham and Barking & Dagenham, and properties in regeneration areas and near Crossrail stations across London, but especially in the east.”
Simon Davidson, Commercial CEO, has already spoken to several developer clients since the vote, all of whom want to confirm that their offers for land acquisitions still stand, and they are not seeking price adjustments. He has also been in contact with a number of banks and lending institutions, who are keen to reassure clients that it is ‘business as usual’ and they will continue to grant new development loans. Simon added, “Markets often suffer short term turbulence but the underlying fundamentals are sound, and the medium and long term outlook is just as attractive as it was before the vote.”
Chris Currell, Group Chairman, is also positive about the coming weeks and months; “We are optimistic about the prospects for the property market, and our focus over the next few months will be to guide our clients and customers through this period of change. Our own expansion and investment plans remain unchanged, and we will continue to seek out new opportunities as they manifest themselves in the months ahead. We have spent over 25 years building a great business with a fantastic team of colleagues who I am immensely proud of. I know we will continue to provide the same high quality of service and care as always.”