As the UK heads to the polls today to vote on whether the country should remain in the European Union, the property industry remains focused on the referendum’s outcome and what it could mean for the real estate world. Corporate occupiers are confident of a Bremain, letting agents believe the rental market will continue as normal regardless of the result, while French agents are mixed on what the vote could bring…
Our own survey results can be found here. Below, we round up the final reactions to the EU referendum from the property industry…
JLL: Corporates and investors think that voters will Remain
In a recent JLL survey of top international corporate occupiers and UK-based investors into their business attitudes to the EU referendum, 80 per cent held the view that UK will vote to remain in the EU.
The survey also revealed attitudes of corporates and investors to future property market decisions in the event of a Brexit. 60 per cent of the investors surveyed felt that there would be no changes to their property strategy in the short or long term as a result of a leave vote. Only 30 per cent expect reduced allocations in UK Property.
The London office market was seen as being by far the most likely to be affected due to the significance of the financial services market which would be most immediately vulnerable to Brexit. The most obvious issue is the potential withdrawal of ‘passporting’ rights allowing them to offer services throughout the EU from London.
JLL predicts that if the UK does leave the EU, there is likely to be a slowdown in investment and leasing in the short term. However, London’s key attributes as a business location: talent base, language, the time zone advantages and the networks of businesses and institutions, would mean that it would remain a magnet for both occupiers and investors.
ARLA: UK rental market “unphased”
Whatever the outcome of the EU Referendum, lettings agents do not believe supply, demand, or rental costs will be significantly affected, according to the Association of Residential Letting Agents.
Two thirds of ARLA agents expect supply to stay the same if the UK votes to leave the EU, compared to just a fifth (22 per cent) who predict it will fall as international landlords pull out of the market. A third (31 per cent) see demand decreasing, as relocating to the UK becomes a less attractive prospect, but over half (55 per cent) think it will remain as high as it currently is.
In London, almost half (43 per cent) of agents expect the number of prospective tenants per property to fall in the event of a ‘Brexit’, as international demand weakens.
While just over a quarter (19 per cent) of agents expect a Brexit result will cause upward pressure on rent costs, the majority don’t imagine a massive change for tenants’ rents, should Britain leave the EU.
“There is no avoiding the EU Referendum at the moment; and whatever the outcome, we are likely to feel the impact of the fallout of this debate in different ways,” says David Cox, managing director of ARLA. “However, it’s important to put this into perspective and not get carried away in a zeitgeist.”
Erna Low Property: Brexit has “hardly affected” French property sales
Th French Alpine property specialists, located in London and in the French ski resort of Les Arcs 1950, report that fears of a Brexit have hardly affected their level of sales this past ski season, when the campaign was already going full steam.
Director, Francois Marchand comments: “Actually, we have sold more properties in the desirable French Alpine resorts than ever before. Saying this, the only worry that we are facing with an Exit vote would be linked to the currency exchange rate and the lower affordability linked to such a purchase from our UK clients.
“In order to counter-act this potential difficulty in making a move towards financing a family retreat or investment in the French Alps, buyers will need to minimise the risks linked to the exchange rates by borrowing €uros from the French banks. There might be further hurdles to go through as a non-EU member seeking a mortgage, but these will come much later down the line as regulations and new rules linked to mortgages to UK citizens won’t be applied straight away and will take months to be implemented.”
France Property Angels: British buyers waiting to see before buying French ski properties
“While enquiries from British buyers for ski property in the French Alps have cooled in the last few weeks – with many “waiting” to see the outcome of the Referendum vote – there has been no change in requests from potential buyers in other countries, such as Belgium and Sweden,” says Isobel Laing of France Property Angels tells OPP.Today. “A ‘Leave’ vote is likely to keep the Brits away for now, due to the expected volatility of the Pound against the Euro. Requirements for a French mortgage may also change, which could reduce the affordability of ski property for some buyers.”
“Ultimately ski property investment is a purchase driven by a passion for the mountains, be it skiing, climbing or other alpine sports,” she added. “Long-term, the French Alps will still offer the best location for a property purchase from where you can enjoy the mountains year-round.”
easyMarkets: Brexit could mean more bureacratic headaches for expats
Nikolas Xenofontos, Director of risk management at forex and trading specialist, easyMarkets, tells OPP.Today: “If a Brexit actually plays out, there are a few scenarios that may affect expats living in Europe. The best case scenario, is that the UK stays in the European Economic Area (EEA) – an economic treaty between Europe, Norway, Lichtenstein and Iceland. It would mean that freedom of movement in Europe is retained but immigration and sovereignty policies the EU currently dictates would not apply.
“A more likely scenario is a special negotiation between Europe and the UK which accommodates freedom of movement in the EU but with less liberality than for EEA countries, meaning more bureaucratic headaches for expats with properties abroad to deal with. A third, and possibly less likely scenario is no agreement between the UK and EU making expats third-country nationals.
“For Europeans living in the UK it won’t hurt as much as the UK has already opted out of most of the EU immigration law. But expat Brits in Europe may be faced with having to apply for temporary visas. The benefits of health, tax, pensions, owning a business or home would all come into question. However, there are more than just EU treaties to consider – there is also the Vienna Convention on the Law of Treaties (1969) which protects ‘acquired rights’ that expats would have built up over time in their host country.
“How a Brexit would play out for expats is not yet clear. And as one of the groups that have the most to lose from a Brexit, it’s ironic that expats that have been outside the UK for more than 15 years, get no say in the matter.”Google+