‘Aurevoir‘ EU

The British people have spoken. They have voted to leave the European Union with a close voting results of 51.9% against 48.1%.

Effects of Brexit on some of us

The Investor
Sterling plunged to its lowest in three decades and the value of London’s big banks sank by the most since the 2008 financial crisis on Friday as Britain’s shock vote to leave the European Union sparked turmoil on global financial markets.

IF the pound weakens in large amount or even in small margin, bank of England could intervene by buying more pounds with foreign currency, or raise foreign currencies.

“If the margin is very narrow, it might not be immediately clear that the country has the mandate to leave or stay. That would open up discussions in parliament, which could be a long process, and that uncertainty would have a negative impact on the markets,” Whitman said.

Philip La Pierre, head of Investment Management Europe, Union Investment Real Estate, said: “We didn’t expect this, but now that it has happened we should not make rash reactions to ongoing London deals.” He added: “Opportunistic capital might swoop in, but overall the UK will certainly face investment stagnation.” La Pierre also warned that investors will begin to move to the U.S and Asia.

Fellow panellist Alistair Dixon, Chairman, Azimuth Global Partners, agreed that “more money will flow into the U.S given the current Eurozone uncertainty.”

Jonathan Baines, consultant at Farebrother, was more optimistic, however: “Things will calm down quicker than we expect,” The UK may even be more attractive to U.S investors, he said, as they realise that they can buy more property for their dollar.

The longer term is not clear as yet.

The Homeowner
British property analysts show that property price growth might either slow down or fall in prices. For investors, this is bad news but this also means affordable housing for first time buyers.

However, alternative possibility, is that mortgage payments could come down. If a Brexit does rock the UK economy as widely predicted, the central bank may be forced to cut interest rates further. This could ease payments for those on some types of mortgages, and for new home buyers. But with historically low interest rates already, the bank has little room to make significant cuts so its impact may be limited.

Irish Brexit Likelihood

The Irish government states:
“Today’s result marks the beginning of a new phase of negotiated withdrawal – one that is expected to take place over at least two years and possibly longer. Businesses can continue to trade as normal and people can continue to travel as normal between Ireland and the UK, including Northern Ireland. In the meantime, the government has adopted an initial Contingency Framework to map out the key issues that will be most important to Ireland in the coming weeks and months. This will be an iterative process as issues emerge and recede in the course of negotiations.”

David Cameron, following his resignation after the vote, said:
“There will be no initial change in the way our people can travel, in the way our goods can move or the way our services can be sold”

Trade issues will be at the heart of talks to thrash out exactly how Britain’s relationship with the EU will work in future.

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