Before the referendum result, developers seemed confident that a Brexit would only warrant a small price drop to be factored in for the few months following the vote, before the market fundamentals would take over again and prices would rise. In the wake of the turmoil that has followed a shock victory for the leave campaign, have they changed their tune?
According to a London real estate agent, the answer is a clear no.
“From a phone survey of 30 developers, with the exception of a few smaller developers who rely on maximum funding, the message we are hearing loud and clear is that it is ‘business as usual’ and that they wish to continue with their land transactions with no price adjustments,” said Anne Currell, Group CEO of Currell.
“The banks and lending institutions we deal with have been reassuring clients – and will continue to grant new development loans,” she added. “We have two development launches in the next few days with 40 and 25 people registered respectively, the latter was only announced on Monday. People are more cautious than usual but still want to buy.
However, there is no denying that, as Brexit looms, developers and investors will have to adjust to market changes. “We expect an increased focus on capital appreciation, leading to buyers targeting areas where property prices are expected to outperform,” said Currell. “These include undervalued east London boroughs such as Newham and Barking & Dagenham and properties in regeneration areas and near Crossrail stations across London – but especially in the east.
“We are open for business as usual and are aware that Brexit will present opportunities as well as challenges.”