Five property services companies are removing Brexit uncertainty clauses from their UK asset valuation reports as the market recovers from a sharp post-referendum drop.
The original uncertainty clause stated that there was a reduced likelihood that a UK property’s estimated value would tally exactly with the price it would fetch if sold.
The vote in favour of Brexit hit the British property market especially hard. At one point there was a suspension of commercial property funds worth millions of pounds after high redemption levels by investors who worried that both prices and property demand would plummet.
The general worry has since abated, with four of the seven funds that had been closed now reopening. The largest UK commercial property index has released data showing that property prices experienced a lower reduction in August than in July, immediately after the referendum.
Robert Gray, Knight Frank head of fund valuations, said that enough certainty now exists in most sectors for the Brexit clause to be withdrawn from all of its valuation reporting.
Colliers, CBRE, Jones Lang LaSalle and Savills confirmed that for some sectors where the uncertainty remains high, clauses have been retained, but the wording is less cautious.
Ian Malden, divisional head of valuation at Savills, said that the company regards the uncertainty clause as redundant for the majority of markets. Some sectors, however, have little to no post-Brexit evidence, which will be referenced in Savills reports as necessary. They include central London offices, large shopping centres, retail parks and development land and buildings.