Brexit: How does the London real estate market

The results of the historic referendum on the British exit from the European Union and behind the main issue of interest to realtors and developers in the United Kingdom as the referendum results will affect the market of real estate of London, which is the locomotive of the British housing market.

First of all, you must consider the condition of the market of real estate of London before the referendum. Some elite areas of Central London where property was overvalued, has seen a significant decline over the past year, which intensified after the introduction from 01 April 2016 increased 3% Stamp duty for investors. The first shock to the elite housing market experienced in December 2014, when legislators dramatically increased the amount of Stamp duty for buyers of real estate more expensive than £1 million pounds. Meanwhile, across London as a whole there is a constant rise in prices, which is attributable primarily to the development of promising infrastructure projects. For example, attractive objects are objects that are built near transport hubs new high speed rail, Crossrail.

How Brexit will affect the London property market? First and foremost, it is necessary to take into account the weakening of the pound sterling relative to the dollar, that makes it more attractive for UK property investors with the currency pegged to the dollar, that investors from Asia and the Far East. However, some investors from Europe have traditionally been considered London as a quiet, protective haven for their assets from the world’s turmoil. In terms of the uncertainty that takes place after the referendum, rely on the interest from such investors is not necessary, at least in the short term. It is very likely that the decline in prices for Prime Central London will continue until the end of this year and next year.

Outside of Central London real estate market more orientirovany for local buyers rather than international investors. British people buy and sell real estate regardless of the UK’s membership in the European Union, therefore, it is expected that this sector of the market will be less sensitive to the effects of Brexit. And indeed, the first data received from the market the UK real estate “first time buyer”, a month after the referendum showed that the demand for real estate sector for affordable housing has increased, despite the overall uncertainty.

The London rental market is likely to become stronger in the process of leaving the EU. In conditions of uncertainty people tend to try to enter into lease agreements for a longer period. This, in turn, leads to the fact that the landlords will continue to raise rental prices. Improving transport infrastructure across London will lead to the fact that landlords will receive an increase as rental yields and capital growth.

® Alice Morgan 26.07.2016 G.

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