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Brexit dampens appetite for property investment

Over the past few weeks the political landscape has shifted and there have been huge movements in the economic markets too.

Property is one of the industries that could be most affected by the EU exit and in particular commercial property has seen a rush of investors withdrawing their money from UK property funds.

Much of the concern is due to the unknown, for instance: what kind of deal will Britain get in discussions with the EU? and how will the financial markets be affected in the mid -long term?

After the leave vote was announced there were fears of chaos in the financial services and banking industries in London, which in turn made some believe that that office space and commercial buildings around London would suffer. This potential cool down in the office market has also contributed to the large number of investors deciding to withdraw from commercial property funds.

It is not just commercial property that is facing a slow down either, with predictions of a significant fall in sales and a drop in value for residential properties too.

 

Specialists in Construction Insurance

The Royal Institution of Charted Surveyors have said that house sales will fall sharply following the shock vote to leave the EU. According to surveyors house sales were down in June and are expected to fall by another 26 percent during the next 3 months as the downward trend continues through the summer. This would contribute to the most negative reading for 18 years.

House prices were already in decline before the referendum vote in May, when the average discount on the asking price was over £25,000.
Rent in London has fallen after Brexit, and this has historically led to developers holding onto land instead of building. Barrett have already announced they may reconsider current land-buying plans due to the Brexit vote.

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