Property Industry hit with reality of Brexit
In an astonishing climax to months of campaigning from both sides, the UK has made the historic decision to leave the EU. Already financial markets are reeling, and the consequences for the property will be far reaching.
52% of Britain’s public vote went to the Leave campaign in Friday’s referendum, with a marginally smaller 48% opting to remain a part of the EU. David Cameron resigned the next day as a result.
The overall turnout of voters was a huge 71.8%. Even though the majority of voters in London and Scotland wanting to remain, there were very unexpectedly high numbers of people in other parts of the country who voted to leave – the North of England especially.
Financial markets were shook by the result. As the first results came in the pound went into freefall, and has since reached levels unseen since 1985.
Stocks were also hit hard. Real estate shares are among those to have suffered the most. By mid-morning, the FTSE 100 was trading down 4.7%.
Consequences are likely to be seen in the property market directly. The cost of funding is likely to grow whereas the property prices will fall.
JLL UK chief executive Chris Ireland said: “In the short term we may see a weakening in occupier demand. The impact on rents may be limited by tight supply, but activity will be adversely hit while initial uncertainty about direction and timing continues.”
Even so, senior figures in the industry have been quick to reassure the market that UK property will remain attractive to investors.