What Will Happen to the London Property Market Now?
The tight vote has come to an end and the "leave-vote" took the majority. As the world waits keenly to see what will happen in the next few months, the property market experts have already made their predictions for what is to come with the London Property market now that the UK has voted to leave the EU.
Analysts prior to the vote suggested that leaving the EU would have a momentous effect on the capitals property market. With almost 40% of London's population not born in the UK, the EU plays a huge role not only in buying and selling but also in the construction of property. A decline in the free flow of people could have a negative repercussion that could spread across the UK.
Although the capital might see a decline in EU citizens working, living and renting around the region, property experts suggest that international buyers from Asia, the United States and other regions will be quick to purchase London properties at lower prices.
This suggests that there will be a two-speed London property market. With areas more reliant on EU buyers decreasing in value and potentially becoming stagnate for a while, but with wealthier areas appealing to wealthy non-EU international buyers continuing to see activity.
Here's a wrap up of the property-experts predictions after Brexit:
1. Property Prices will Decline
With uncertainty comes uncertain confidence and tighter pockets. The lack of buyer activity will result in higher supply and subsequently, declining property prices.
2. International Buyers will Be Making Offers
In an ideal world, Londoners would buy London properties. After Brexit, it is predicted that non-EU buyers will see the greatest potential for investment in the London market resulting in more international buyers in the capital.
3. Less Affordable Homes will Be Available
London has been making a great effort to increase the construction of homes around the city to make housing more affordable, however, construction will be put on hold until Brexit plays out. With a majority of construction workers coming from around the EU, you could see a decrease in labor. Furthermore, builders will wait to see what happens with inflation, house prices and confidence on both sides of the market.
4. The Rental Demand will Falter
Rental owners suspect that their rate of prospective tenants per property will decline as international demand wanes, but experts haven't yet agreed if the prices will rise or fall after Brexit.
5. The Market will Stabilise Quickly
The London market is still more than £200,000 above the market value of 6-years ago. The London property market is likely to stabilize and remain strong against any type of economic instability.