London prime residential market and Brexit - Howard Kennedy Real Estate breakfast
More than 50 residential developers, funders and bankers gathered this morning at Howard Kennedy’s offices to learn and discuss the impact the UK’s decision to leave the EU is and will have on the London prime residential market.
Speakers at the breakfast briefing were Ruth Lea, Economic Adviser to Arbuthnot Banking Group, Dominic Grace, Head of London Residential Development at Savills, Katy Warrick, Head of London Residential Development Research at Savills, and Stuart Buchanan, a Director at Acuitus Finance.
Paul Springall, Partner and Head of Real Estate said:
This was the first breakfast briefing of the autumn term and we where delighted to be able to secure such a strong line-up of speakers. We were also thrilled with the turn-out and discussion – testament that the uncertainties of Brexit continue to weigh heavily on minds, but with some comfort that overall Brexit is thought not likely to have long term adverse effect on our market place.
A confirmed and passionate Brexiteer, Ruth Lea encouraged delegates with her cautious optimism for a future outside of the EU. She expects Article 50 to be triggered in the early part of 2017, with the UK’s EU exit in early 2019. The UK is likely, she said, to negotiate a bespoke Brexit arrangement, rather than remain in the Single Market or go down a WTO route.
Whatever the outcome, she said that the UK must remain an open, outward looking country that continues to be business friendly.
Katy Warrick and Dominic Grace followed providing delegates with an insight into the London prime residential market in the run up to and following the EU referendum.
The market is, they said, driven largely by sentiment and one where transactions can easily dry up. The market is already showing signs of slowing. London remains, however, an attractive world city for international money, and the weaker Sterling has offered opportunities for overseas buyers.
Delegates heard that there are some 6,500 prime residential properties due for completion every year over the next five years, and it is not entirely clear where the buyers will come from. The post-Brexit market is difficult to forecast, but is expected to be slightly behind previous years’ activity.
The Howard Kennedy breakfast briefing was concluded by Stuart Buchanan from auctioneers Acuitus. Residential investors are, he said, increasingly moving into the £1-2 million commercial property space following increased uncertainty in the residential markets. He reports that there remains a strong appetite from the high street and challenger banks to lend. Building societies, he adds, are also increasingly trying to muscle into the market, with good interest rates currently available. The private banks continue to lend, with their focus more on the individual.
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