The aftermath of the distinctive second quarter has generated an array of contrasting opinions. It has undoubtedly been an intense period for all stakeholders within the London property market, however is there now light at the end of the tunnel?
Reports from Property Week have demonstrated a positive shift towards the end of last month, seeing major retail investors looking to re-access the market they so promptly left in the recent period of uncertainty. The question is; will this new confidence mask the 18% fall in property investment experienced from Q1-Q2?
The reduction of the pound value has encouraged a significant upward shift in foreign direct investment. In terms of the euro, the average London residential property has reduced by £42,000, so unsurprisingly many foreign investment companies have been quick to seize this opportunity! Estate Agents and Development Managers in both the commercial and residential sector have seen an increase of up to 50% in quantity of calls from countries such as Italy, Spain, Middle-East and China.
The temporary closure of some of the UK’s largest institutional funds has also prompted a key discussion point. Many people in the industry have made the decision to close off funds as a reaction to the increased demand for withdrawals, following a drop in investment confidence. That said, certainty appears to be returning as Aberdeen Asset Management have recently reopened their UK property fund and allowed for reduced withdrawals following the sale of two properties on Oxford Street at a 15% price cut.
Many firms have recently published their half-year reports, which numerous analysts have used to measure the true effects and directional changes which have recently taken place. Savills posted a ‘City Investment Watch’ on the 14th July 2016 which stated that in comparison to Q1, Q2 transactions increased by 50%.
After considering the array of opinions and statistical data, it is still difficult to predict what the short and long term effects of Brexit will entail. However as the dust settles and the smoke begins to clear, hopefully certainty will return and the economy will begin to flourish once more.
Bradley Flatt, Resourcer, General Practice, Foundation Recruitment