With last night’s astonishing referendum result in favour of leaving the EU, it’s not just the 48% of Britons who voted remain who have gone into shock. At one point in the last few hours, sterling had fallen to its lowest position since 1985, a mere 1.32 against the dollar. The extent of the fall was made considerably worse by an over-confident climb earlier in the day, based on opinion polls.
There have been huge consequences of this already, with the price of stocks tumbling and a rapid investment in the safest investment, gold, which has in turn caused the price of gold to skyrocket.
We can claw back some positives from this, however, as we look to the behaviour of overseas property investors. With the pound in such a weak position, investors in Hong Kong and the Middle East are able to save approximately 10% on a property purchase. This means that the property market will remain relatively buoyant in this difficult time.
Overseas investors are likely to find themselves in a win-win situation. Nicholas Spencer from Henry Wiltshire’s Knightsbridge office, says,
“I think the brighter and braver will realise that the pound will inevitably strengthen and want to buy sooner rather than later. There is sufficient international money ploughed into London real estate to maintain the stability of the property market.”
There is still little certainty, especially with David Cameron’s resignation and the possibility of a general election. However, this is expected to be relatively short term, and Henry Wiltshire expects to see a return to relative stability by the fourth quarter of this year.
Broadly, the team at Henry Wiltshire feels positive about London’s housing market. Omar Jumaili from the Nine Elms office observes that,” the UK property market will continue to be driven by the same issues that have always driven it. European buyers in London may hesitate to buy for the time being, although London will still be a safe haven compared with other European Cities.”