The issue with Brexit today is the uncertainty, and markets hate uncertainty. However, the main reasons why people buy in London and the UK will not change post-Brexit.
For example, the UK has an excellent and highly respected legal process. When you buy a property, you have the security of title on that asset. We also have an educational system revered across the world that attracts domestic and international buyers. London is also the financial services capital of the world. Not only does the UK straddle time zones in both the east and west, but English is also the spoken main language of business and has the highest regulatory and compliance standards across the world.
‘It’s no coincidence that major employers, the likes of Google and Facebook, are increasing their footprint into London.’
The simple economic equation between supply and demand also works in the market’s favour. In the long term, as a country we cannot build enough houses, particularly in prime, central London. Therefore, property in the UK, whether for living or as an investment, is a sound long-term investment, that historically has always appreciated in value.
None of these things, in my opinion, will change post-Brexit, despite uncertainties.
London has suffered from house price falls in recent years, but I believe this has a lot more to do with domestic tax changes particularly with regards to Stamp Duty rather than Brexit. Now that these changes have now been factored into the market, in my opinion, prices will stabilise and grow.
‘Even in an unlikely ‘no deal’ scenario, the fundamentals are not going to change.’
When it comes to businesses, the UK government has publicly stated that corporation tax is on a downward curve, and we already have one of the lowest corporation tax rates in Europe. It’s no coincidence that major employers, the likes of Google and Facebook, are increasing their footprint into London. Some companies might have to offshoot into Europe, to protect the UK side of their business, but I certainly don’t see a massive exodus of firms post-Brexit. Even in an unlikely ‘no deal’ scenario, the fundamentals are not going to change.
So, do I see the prime property market being massively hit by Brexit? No. Do I see it being partly affected? Yes. For example, we may see international employers choosing their staff to rent, rather than buy, for one or two years. This corporate letting arrangement could present an opportunity to the buy-to-let market. Fundamentally, however, from what I see from international and domestic clients buying in London, it’s business as usual.