Today Prime Minister Theresa May has triggered Article 50, the president of the European council has been notified of the UK’s withdrawal from the EU, and the Brexit process has officially begun.
Portico Estate Agents have reported on how they think Article 50 will affect the London property market in their latest release.
Mark Lawrinson, Regional Sales Director of Portico Estate Agents, commented on the possible effects of Brexit on London’s housing market: “I don’t think the triggering of Article 50 will affect the property market directly from today. In one sense it removes the uncertainty surrounding when Britain’s withdrawal process from the EU will start, but in another way it will create economic uncertainty until we know what deal we will strike and therefore what Brexit actually means for our country.
Lawrinson added: “Brexit will no doubt mean a turbulent two years for the London and UK market as we begin to hear what negotiations and proposed deals are being put forward for our exit of Europe and the single market. I think we will see a continued slowdown or lethargic London market when it comes to sales volumes, transaction volumes across London are already more than half of what they were before the 2008 crash.
London has a significant part to play in businesses who trade and operate across Europe and the world, and a buoyant property market relies on the UK’s economic health. If Brexit negotiations go well this could cause further price growth as the economy grows and we see the nation’s confidence lifted, but equally, if a good deal isn’t reached then the international companies who operate here or look to relocate here might change their minds, reducing the number of residents who live in the capital and again further reducing the transaction levels, which could ultimately lead to price decreases.”
The advice is to make property decisions based on individual situations rather than gambling on how the market may or may not play out.
Robert Nichols, Portico’s Managing Director, makes an important point, stating, “Right now we may experience some uncertainty, but as the negotiations progress, we will regain some much needed stability into the housing market, as people realise that the effects of Brexit are not catastrophic and go on with their lives. We’ll hopefully see transaction levels increase as a result, which are currently dangerously low and affecting price growth across the capital.
“Today’s events are likely to have a much more profound effect on foreign investment however, with the weakening pound expected to fuel demand from overseas buyers and investors.”
Many have also speculated that today’s events may make the Bank of England think carefully before increasing interest rates, despite the recent inflation increase. If this is the case it will remain cheaper than ever to borrow and get on to the property ladder.
Full article is available on Portico: https://www.portico.com/blog/our-news/how-will-article-50-affect-the-london-property-market
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