Real Estate firm Savills believes that the UK’s decision to leave the European Union has potentially opened up profitable opportunities for overseas investors, writes property development expert Richard Carr.
Although Brexit created some uncertainty for farm land values in the UK, Savills believes that the weak pound creates a favourable buying environment for overseas investors, whilst the reduction of supply may help to support values.
“The full impact of Brexit on all of the UK’s property markets will be very dependent on the macroeconomic background and the evolution of the story over the next two to three years. We must stress it is early days and there are many unknowns,” said Ian Bailey, head of rural research at Savills.
“Uncertainty is the key factor and it is very likely that farmland market activity in the second half of this year will be more subdued as potential sellers wait and see. Our research shows just over 100,000 acres were publicly marketed across Great Britain in the first half of 2016, which was on a par with activity for the same period of 2015.”
As property developer Richard Carr predicted, much of the post-Brexit gloom is lifting and many markets are predicting positive outlooks heading into 2017.
Brexit looks set to offer new opportunities
The fluctuations in many markets following the UK’s decision to leave the European Union are beginning to right themselves with the real estate market uncertainly appearing to be shorter lived and less severe than many investors first feared, according to new analysis.
LaSalle Investment Management’s mid-year Investment Strategy report said that the correction in real estate pricing is expected to be largely restricted in the next 18 months, whilst medium term capital inflows into real estate will only be interrupted, not reversed.
Also, besides from the country’s slightly unclear political landscape, given the UK’s ultra-low interest rate and bond yield environment, real estate yields are only expected to increase by 40 to 50 basis points by the end of 2017.
The current volatility of the UK’s economy sparked by the country’s decision to leave the European Union last month could provide profitable opportunities to foreign investors, writes Poole-based Richard Carr.
Post Brexit opportunities?
According to a report published by Arcadis, market conditions in the UK are ripe for opportunistic foreign investors by continuing to invest and store their wealth in prime property in London.
With property values stagnating and the sterling falling relative to the euro and the US dollar as a result of Brexit, latest reports suggest that buyers from Europe, Asia and the Middle East and ready to secure bargains in the London prime housing market.
Further falls are forecasted for the sterling before the year is out and some Banks don’t see it recovering until next year. Property agents are also suggesting that the recovery of prime London house prices might take a further year into 2018 meaning that those investing £2m into property may see their investments rise by as much as £250,000 in value.