Brexit could cause short-term hit, with long-term gains

The uncertainty being generated through the Brexit negotiations could cause short term falls in property values in Britain. However, new analysis suggests that this could present opportunities for real estate investors, according to a new survey.

Drops will remain fairly subdued given the economic outlook, the latest UK property market report from property investors M&G Real Estate states.

Panic

This report shows that despite a perceived panic in the post-referendum landscape, including the property market, investment opportunities in London will be more readily available.

In addition, the report indicates that sectors such as the private rented and long lease property will continue to provide attractive yields for pension funds and other investment types.

The outlook for the UK property market is, according to the report, now in a much stronger position to cope with any short-term uncertainty than during the crisis.

M&G Real Estates suggests that occupier markets are offering comfort, with supply issues continuing in many locations. With Britain seeing seven years of below average construction levels, rents have been rising in more prime locations.

Overseas opportunities

Further data from the report shows that a number of overseas institutions are looking to take advantage of the slump in sterling. It appears that Brexit is largely a domestic concern, with investors from overseas looking to London as a safe haven.

Richard Gwilliam, head of property research at M&G Real Estate, noted: ‘We expect uncertainty during the Brexit negotiations to cause limited falls in capital values in the short term and commercial property remains a compelling asset class on a long term basis.’[1]

[1] http://www.propertywire.com/news/europe/brexit-negotiations-dent-uk-property-market-open-investment-opportunities/