Overseas investors are holding off from residential market activity in London because of worries over the EU referendum result, according to new research
The figures, produced by estate agent Hamptons International, back up claims that architects are suffering as clients hold off on investment decisions in the UK until they know the outcome of the vote.
Last week, 2012 RIBA Stirling Prize winner Stanton Williams announced 13 redundancies, blaming uncertainty over Britain’s continued EU membership as a factor in the decision.
Fionnuala Earley, director of research at Hamptons International, said: ’Brexit uncertainties seem to be affecting London’s property markets as international buyers and sellers become more cautious.’
Hamptons’ data shows that the proportion of home-buyers from outside the UK fell to 25 per cent in the first quarter, down from 32 per cent in the same quarter last year.
In addition, the proportion of overseas owners as a proportion of those selling fell from 21 per cent to 14 per cent over the period.
‘The fact that the proportions of both buyers and sellers have fallen back seems to underline that this is an uncertainty issue,’ said Earley.
‘Both camps are unsure of how the outcome of the vote might affect the prospects for the London housing market, yet are not concerned enough to make any rash decisions and are willing to sit tight for more clarity.’
In prime central London, where overseas buyers make up a bigger share of the market, the proportion fell from 54 per cent to 47 per cent.
In April, the Royal Institution of Chartered Surveyors (RICS) identified an easing of international demand for UK office, industrial and retail property since the referendum was confirmed in the second quarter of last year.
RICS chief economist Simon Rubinsohn said: ‘There is no doubt that since the EU referendum became a certainty following the general election last May, we have seen a decline in interest from overseas investors in UK commercial property.
‘At least in the short term, we know that international retailers and service providers are finding the UK market less attractive.’
But Matt Oakley, director of commercial research at property adviser Savills, warned about attributing too much weight to claims that slowdowns are being caused by Brexit.
He said: ‘Much of this slowdown is to do with cyclical change. A lot of people seem to be missing the fact that the market has possibly peaked.’
How Brexit uncertainty is affecting the profession:
- Stirling Prize-winning practice Stanton Williams has laid off a dozen staff after a series of schemes stalled. A statement released by the company last week said: ‘Increasing uncertainty about external factors such as Brexit and worsening market conditions has resulted in delays in the commencement of a number of projects.’
- Farrells has made five staff redundant, pointing to the uncertainty resulting from the EU referendum and mayoral elections. A Farrells spokesperson told the AJ: ‘Towards the end of 2015 a number of our projects in the capital paused in the face of economic and political uncertainty, chiefly driven by the London mayoral elections and the outcome of the EU referendum.’
- Jack Pringle of Perkins + Will has warned that a decision to exit the EU would cause clients to pull the plug on schemes in the UK. ‘We’ve already had two or three London clients telling us they will cancel projects if we leave the EU,’ he said.
- 55 per cent of those polled in an online survey of AJ readers say a Brexit would be damaging to their business, with a further 39 per cent saying it would be ‘neither damaging nor beneficial’.
BREXIT GRAPHS HOW WOULD LEAVING THE EU AFFECT YOUR BUSINESS TOTAL PIE