You may have heard a few worries relating to the property market over fears of Brexit and much of it is characterized by uncertainty. What does a post-EU Britain look like? How long would a formal Brexit take? That uncertainty is filtering into the residential property market.
When it comes to UK property there are two types of markets. There is the domestic market, where you have your family from Leeds looking to buy a three bed in the outskirts and you have the overseas market, that is dependent on investment from Russian oligarchs.
When it comes to the domestic market of owner-occupiers, Brexit may not have much impact. In terms of supply and demand which characterizes this market, there isn’t much impact from outside influences that could cause any problems. Things like inflation rates are the only things that really have major effect. Many property experts predict little impact on the domestic market from a potential Brexit.
For London, however, there is a greater risk to the property market from a Brexit. The markets are braced for a plunge in the value of Sterling, should the UK vote to leave. Such is the tempestuous quality of the whole debate Sterling fell to a seven-year low against the US dollar, when Boris Johnson came out in support of Brexit. Investors could shun the pound. Those buy-to-let landlords already invested in London, may choose to sell up, rather than see their investments value plummet.
The top end of the London property market relies on heavy foreign investment, 49% of investors in central London property are foreign. London is seen as a safe bet for property investors, who don’t anticipate that their properties will lose value suddenly overnight. The wealth from oil rich Russians and Saudis to Europeans who trust the UK market over their own countries respective markets opt to invest in the city. If Brexit is perceived as an international crisis, this level of investment will quickly disappear.
On the flipside there is also a chance that weaker sterling could attract more investment in London property. Some investors see the strength of the pound as off putting and a change in this could signal some investment. During the recession, when house prices plummeted, foreign investors flooded the UK market and snapped up the best deals.
Financial transactions tax, which the UK government opposes, would potentially be fine in the event of Brexit, so could many other property rules and regulations.
Waltham Estates, is a family run Estate Agents based in the heart of Walthamstow. We can sell or let your home in Leyton and Walthamstow, we offer guaranteed rent schemes, so you never have to worry about missing your mortgage payments, should you choose to rent your property.When it comes to Property management in walthamstow, we offer an all inclusive service. Find out more