“I was as surprised as everyone else when I awoke on Friday morning to discover the UK had voted to withdraw from the EU. I had gone to bed with the pound soaring and Nigel Farage saying it looked like the Remain campaign had won it, and I slept soundly in the knowledge that “the markets don’t often get it wrong”, writes Cory Askew, Area Director, for Chestertons. “Sadly that wasn’t the case this time round, but rather than fielding calls from the string of panicked sellers and landlords that I had anticipated on Friday, most clients I spoke with were pretty measured and level-headed about the new reality. Most of us in residential property are already pretty battled-hardened having gone through the greatest economic crisis in history back in 2008, and we know full well that London’s house prices then were pretty much back to where they had been previously within about 18 months.
“Once the dust settles and political stability is restored, we may just discover that a small “Brexit correction” is the best lubricant for a London housing market that has been bottling up demand for some time, and desperate to see transactions start moving again. The big difference between 2008 and now is that the mortgage credit tap remains fully open and, for as long as those mortgage rates remain at rock bottom – and, dare I say it, they will perhaps go even lower if the Bank of England cuts its base rate in the next few months – then the market will continue to move and buyers will continue to come forward. It is understandable perhaps that sellers may take a deep breath before deciding to put their homes on the market, but with renewed interest from overseas investors on the back of a severely weakened pound and continuing appetite from committed buyers at home, demand for well-presented and keenly priced London residential property is unlikely to tail off any time soon.
“Despite many pundits reading the referendum result as a protest vote by the hitherto disenfranchised, globalisation is a genie that won’t be put back in the bottle. There is no going back for UK PLC, and the country now has to move forward boldly into uncharted waters. Whatever form our relationship with Europe takes over the coming months and years, I am very confident that the economic ties will remain strong and that London will remain at the heart of the Global Financial Services sector. No doubt there will be some turbulence in the short to medium term, but for the savvy investor, it may be advisable to bear in mind the wise words of Warren Buffet and ‘be greedy when others are being cautious’.”