Brexit Vote on 23rd of June 2016

UK’s possible exit from EU, causes a massive uncertainty in the scales of financial assets. Chris Williamson, the chief economist of Markit, said that as per the polls, it shows how it has impacted on ’employment growth, backlogs of work and inflows of new business’.

Prime Central London Property Market

The prime central London property market has slowed to 0.1% in May, which is lower since Oct 2009.

‘Demand remains relatively subdued but in a change from recent months, the primary cause in May was the Brexit vote rather than new rates of stamp duty. Indeed, there are overlapping layers of uncertainty affecting supply and demand that are difficult to differentiate but which produce a cumulative impact,’ Bill explained.

Indecisive in selling or not

Buyers and sellers are delaying in taking a decision as they have no proper vision in what the economic and political perspective will be due to the Brexit.

The asking price has fallen to 10% or more and the number of active buyers has halved over last year. Tom Bill, the head of London residential research at Knight Frank, considers it to be a ‘Price Sensitive Market’.
Due to the effect of the two stamp duty increase in the space f 18 months, demand was already more restrained and the ratio of active buyers per available property in prime central London has fallen to 4.8 from 10 over the last year.

However, regardless of the forthcoming Brexit vote, demand is reinforcing, as buyers reduce asking prices to reflect higher transaction costs.

Over last two years, however, there has been an increase by 2.4% since 2012

Pragmatic Approach of Sadiq Khan

The mayor of London Sadiq Khan plans to double the number of houses to 50k by year 2020. His approach is to control rents and put higher restrictions on overseas investors.

‘All the evidence so far is that pragmatism is triumphing over ideology. The last thing he will want to do is emit signals that undermine the capacity to deliver at least as many homes as last year. What is essential is that the number of new homes built doesn’t fall,’ said Professor Tony Travers, a local government expert at the London School of Economics.

However, the backdrop of the EU referendum has dominated Khan’s early days in office. ‘If the UK voted to leave and London voted to stay in, the Mayor would be well within his rights to argue for greater autonomy from the rest of the UK to ensure the city’s economy is protected,’ added Travers.

Find out more of how guaranteed rent will help you regardless of the Brexit vote.