With the announcement that England has voted to leave the European Union (Brexit), property experts have predicted a downturn in the UK property market.
Independent property market expert, Henry Pryor, has predicted a fall in house prices, “House sales expected to fall 20%. House prices expected to fall 15%”. KPMG have similarly predicted a 5% fall.
Property experts nationally, are fearing a drop in sales due to nervous buyers. Charlie Ellingworth, of Property Vision, has predicted a return to “times of dislocation”, such as the market during the recession of 2008. JLL’s Adam Challis, expressed “Price growth will be flat over 2016, reversing gains from the first half of the year”. Richard Donnell, the director of research at Hometrack, warned of a “short, sharp, shock for a quarter”, as people wait to see how the market recovers before committing to a purchase.
A contributing factor to the drop in property transactions, is concerns about job security, experts predict. Jeremy Leaf, former chairman of The Royal Institution of Chartered Surveyors (RICS), said “inevitably, some will feel nervous- not least for their jobs.”, continuing “If they feel their jobs are under threat then they might look at their own circumstances and reconsider a big move like a property purchase”. This prediction is supported by the recent survey by the RICS, suggesting 80 percent of its members believe fear of an unknown future holds back investment flows.
However, whilst British citizens refrain from purchasing, the drop in the pound may make for a rare opportunity for overseas buyers to invest in prime location property. Henry Pryor, stated “Sterling crash makes UK prices 10% lower for foreign buyers”. Peter Wetherell, a Mayfair estate agent, has predicted “For overseas buyers, a big drop in the value of sterling will effectively offset the stamp duty and tax adjustments, and make prime London property a lucrative investment,” he said. “Dollar-based Middle East and Asian investors in particular will look at short-term buying opportunities in central London.”