16 Mar 2019
Buyers’ inquiries, agreed sales and instructions have failed over Brexit unpredictability- the RICS latest market surveys indicate. In some regions, both buyers and sellers are waiting for the closing of Brexit, where the survey found 77 percent of the respondents blamed uncertainty linked to it for the delay and waiting. London was the most popular city for overseas property buyer last year but confusion over Brexit is hurting buyers and sellers, leading to pause in the transaction. As per Savills report, in January only two deals were made in the West End, which was lowest on monthly record and there were four transactions in the City of value £111.25 million that was 75 percent less month-on-month as compared to 2018 and 80 percent low from 5 year average of £500 million.
The increase in stamp duty hit London properties but the stagnation in the market has not affected the foreign investors. According to leading property investment companies reports - four of five leading property investors from the UK, South Africa, Dubai, and Hong Kong are still buying where the polls found 450 high net worth investors from these countries that constitute 85 percent of the investors bought property in commercial or residential markets, and they are still seeking opportunities, mainly, during Brexit, as the prices are declining and the exchange rate is favorable.
Rents and number of renters grow
The number of renters in the country is growing where around a fifth of the total population lives in rental accommodations from a private landlord and the rents continue to increase every year. The latest warning by RICS states it may grow over the next 15 years and climb by 15 percent, due to a shortage of supplies of affordable homes. The changes during Brexit can increase the tax burden on buy-to-let homeowners and it can become less lucrative to the renters. The recent reports also find the rents declined in some areas in the last year like Humber and Yorkshire, where the drop was by 3.63 percent and in London, the price dropped by £30 a month.
Last year Mark Carney, the governor of BoE, warned of recession where prices could slide by a third, in case of no-deal Brexit, but the annual figures indicate the prices are competently stable and growing in some regions. The increase in investment from overseas indicates people are considering various other factors, not just Brexit.
Scottish property gain during Brexit
In 2018, the Scottish retail, offices and their property markets outperformed the UK markets as per CBRE reports. The research found annual Scottish all commercial property returned 5.6 percent in 2018, which was slightly low in comparison to 6 percent of UK all property.
Office and industrial returns in Scotland increased y-o-y where offices gained 8.2 percent (that was 5.9 percent in 2017). Double-digit returns were delivered by the alternatives in Scotland, where the key challenges in the retail sector kept the markets subdued in the year-end. The retail sector gained with the sale of Fort Kinnaird Retail Park located to the east of Edinburg.
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