We know that lot’s of people will be talking about Article 50 and what it might mean for property owners, so we thought it was a good idea to ask Property Expert and general legend Ed Mead for his opinion.
The last two/three years have seen an inversion of the usual received wisdom on property. London and the SE have always gained the plaudits as price rises, and to an extent transactions, have raced away from those elsewhere in the UK. As investors, the backbone of the PRS, have sought yields and affordability they’ve looked elsewhere and driven prices up. The result has been capital values rising fast in Russell University towns and other locations as jobs and industry have returned to places other than London. Prices in PCL have fallen and in Greater London stopped rising as fast.
So, the potential downsides of Article 50 being triggered. It could simply calcify the already stuttering confidence of buyers everywhere. The Home Owners Alliance says that c. 1m buyers, a huge number, have put their plans on hold already and being caught in headlights watching negotiations is hardly likely to help. If there are c. 10 buyers for every property and c. 1m transactions per annum that means c. 10% of potential buyers have downed tools for the time being.
You can rely on the financial markets to have a field day, they love a good political ruck and the FTSE, despite being in record territory, will most likely swing around. Currency fluctuations, already leading to higher food and fuel costs, will increase pressure on an already “squeezed middle” meaning big spends are unlikely to be front of mind for the next two years.
The upsides are perhaps more limited and macro in nature BUT perhaps may have more impact. The Article 50 focus will be on little old UK vs. EU but the EU is hardly in a great place politically or economically. Right wing politics, cross border movements, Euro instability, Debt, worries others may follow UK, an irascible and unpredictable US President etc etc are hardly a recipe for security.
One thing the UK, and particularly London has always done well is security. Not just looking after citizens day to day, but the rule of law, political and economic stability – these qualities are why people the world over, given the luxury of choosing a second home, have often picked London. For all the reasons mentioned above there may be more reasons than ever and if you throw in cheap Sterling then perhaps the result of all this uncertainty might just result in a fair bit more of overseas money coming to London whilst the rest of the UK is perhaps more reticent, think 08/09 financial crisis.
I’m convinced that it’s not all a recipe for negativity though and at least the ride is starting.