Despite widespread reports that international businesses are already pulling investment from the UK in light of the EU referendum result, one estate agent says that his firm has been inundated with enquiries from international property investors looking to invest in the prime central London housing market before the ‘inevitable recovery occurs’.
Business climate following the Brexit vote may be hurting the economy, but many foreign property investors perceive this as a potentially good opportunity to invest in the capital’s housing market, according to David Adams, managing director of luxury estate agency John Taylor in central London.
“The vote in favour of a Brexit on Friday was a shock. However, the reaction from clients has been equally surprising,” he said. “I was inundated with more calls from the Middle East on Friday than on any other day in my career.”
Adams says that many Middle Eastern clients from Jordan, Saudi, Kuwait and Dubai have offered “unprompted congratulations” on the outcome of the EU referendum, which, “with all the doom and gloom here, I did not expect”.
He continued: “The prevailing view is that England, after some instability, will power ahead through trading links with the former Commonwealth countries and the Middle East as well as with continued trade with the Americas and Asia.
“Many investors are interested in doing business within what they see as a currency window, before the inevitable recovery occurs. Global exporters see the potential of the UK as a large and more attractive market once EU trade tariffs have been removed. “I have also had concerned calls from Monaco, France and Switzerland, but their concern is more for what will now happen in Europe and whether more referendums will be held. Interestingly they all think England will, after a short period of instability, do well.
Adams reports that the number of enquiries and the offers made on properties in London on Friday and over the weekend were greater in value than all of the sales made in the year to date through the London office. The currency which fell over 10% against US backed currencies appeared a major incentive as the speed of transaction became more important than the price.
In terms of what happens next, Adams believes that it is unlikely that anything will fundamentally change over the next 28 months.
“The process of a Brexit is unlikely to start until Q4 2016 and the earliest that The UK is likely to leave the EU is October 2018. Relations with Europe will continue following an exit from the EU, albeit on revised terms, and the UK has over two years to put in place new trade agreements with the rest of the world including all of the former Commonwealth countries, which were major trading partners until the 1970s. The Canadians have already begun making free trade agreement overtures.”
He added: “In London we have suddenly all been handed a major global business opportunity, the biggest in 40 years. It will be up to us to make of it what we can. The collapse of the political order in the UK creates further instability and so there is likely to be hesitancy and uncertainty for the next six months. But I am also sure that future generation will say that this period was the best time, and best currency window to come and close a transaction in London, because when we do recover, as we are certain to do, the pound and the property market will be on a steep recovery trajectory.”