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Will Brexit be hard?
How is the impending UK exit from the Eurozone affecting the commercial property market?
Since the vote was confirmed last summer, the uncertainty about the future of the economy and particularly the commercial property market has been a source of constant concern.
Theresa May’s plan for a Hard Brexit may have removed a bit of the doubt around what will happen next, but the market is still in a potentially volatile state, with values remaining firm at present but for how long?
The UK IPD monthly property index rose just 2.8% in 2016 compared with 13.6% in 2015 which shows exactly how far the sentiment has fallen across the country.
However, as usual with property matters, things are not quite what they seem. Demand for commercial property in the capital remains as high as ever. Some might even suggest that the uncertainty across the Eurozone and the globe, has made London even more of a safe haven for funds. The weakness of the pound has also had a positive impact on the value of UK assets for overseas investors, though natural caution has directed much of this investment towards the known prime areas of the West End.
The residential property market across the UK has suffered far more than the commercial sector with Housebuilder’s share prices being dragged down, closely followed by those of the large commercial property companies and investors.
It will take some time before the outcome will be predictable with any sense of clarity due to the ongoing legal wrangling. But the outlook is certainly a lot better than what was being suggested in the immediate aftermath of the vote last year.
For further information on investment in the capital and across the UK please contact Mark Fisher.