Phanom Kanjanathiemthao, Managing Director, Knight Frank Thailand
Residential Market
“This is an opportunity for the new investor who interested in investing in London or UK. The buyer will benefit from: (1) the devaluation of Sterling currency, which is 12 to 13% lower now; and (2) a possible price decrease or greater bargaining power for purchases.
Of course, today’s price trend has not shown a great reducing in prices. Our advice is “wait and see”. The short-term trend will be much more clear within the next 3 to 6 months.
For long term trends, the London residential market is still strong demand due to its under supply situation. London still remains a prime centre for international education, a sought after tourist destination, and a safe and vibrant city to live in”.
Commercial Market
“As commercial property shall be subjected to business operations and the economy, the commercial property market seems to have negative impact from the Brexit vote. However, it is still early to say as it remains to be seen how the negotiations and agreement between the UK and EU to be settle, which will happen next year. However, at this moment, the market has leaned toward a negative outlook for commercial property. This is a good time and opportunity for the investor to start studying potential properties and the market, to shorten the time when decide to move forward”.
It should be noted that hotel market will be enjoyed a high number of tourist due to the devalue of Pound Sterling.
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Nicholas Holt, Head of Research for Asia Pacific
Asian investors
“The UK has long been a destination for Asian real estate investors, with the attraction of the strong liquidity, stable governance, transparency and clear title, meaning that investors from China, Hong Kong, Singapore, Malaysia and Thailand have all invested in bricks-and-mortar in the country.
“With the decision to exit the European Union, for existing Asian property owners, the fall in the pound will impact the repatriation of any income returns, as well as the gains on any disposal. Although there is likely to be more volatility in the market, ultimately most investors are looking to the long term – so will continue to hold their assets, in the hope that any short-term instability will eventually subside when more clarity of the UK’s role in Europe is determined.
“The decision, however, could also present a buying opportunity, as the significant drop in the value of the pound, as in 2009, could lead to an uptick of interest by Asian investors, who, over the last few months have adopted a wait-and-see approach to the referendum – and will now see their buying power increase significantly.
“Chinese, Singaporean and Hong Kong investors especially, looking at both residential and commercial properties – most likely in London – will be monitoring the market carefully and looking for opportunities to potentially increase their exposure over the coming weeks and months.”
Grainne Gilmore, Head of UK Residential Research
UK Residential
“The UK vote in favour of Brexit has the potential to make a relatively swift impact on the housing market. The scale of this effect, especially in the medium to long-term, will depend on the outcome of negotiations on the UK’s exit.
“In the short-term, consumer confidence is likely to be knocked by the continued uncertainty, especially with regards to trade. This may weigh on activity in the market, especially those making discretionary purchases, which could result in a slip in transaction volumes, and prices. However, uncertainty could also result in a further dampening of homes coming onto the market, and this lack of supply will provide a floor under prices.
“In the longer term, any increase in inflation could trigger base rate rises, which would again translate into higher mortgage rates. This scenario would be more challenging for those on variable rate deals. If house prices are also declining, this will put the most pressure on highly leveraged borrowers.”
