The Brexit debate and vote put a dent in presales for second quarter residential properties in London, with a 34% drop.
Editor’s Remarks: The UK’s real estate market has seen a slowdown in the past year and a half. The London property market has been suffering from the increase in taxes on luxury homes in place since December 2014 and a hike in stamp duty for landlords and second home owners this April. Demand have fallen by 23% in Q1. Now, the effects of Brexit are rippling through the real estate market. A Societe Generale report earlier in the week forecasted a drop of up to 50% in luxury home prices and 24% in commercial properties. Asset manager Aberdeen suspended its trading two weeks ago on poor investor sentiment for a week. The company agreed to sell a commercial property on London’s Oxford Street for £124m on Friday, 15% below asking price, which shows companies might be stretched for cash and investors are looking for discounted opportunities. London could, at this point, lose its top global position in investors’ preferences for prime real estate portfolios.
What to watch: UK, Brexit, Housing Market