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Property After Brexit

Property After Brexit
Despite what our beleaguered politicians foisted upon themselves and us the market has reacted in a number of ways:
 
  • Some of the big property investment funds have blocked withdrawals by investors, which has spooked some shares so much that they have been suspended from trading.
  • Despite this turmoil foreign investors are apparently obtaining up to 40% discount on central London flats if you take into consideration the drop in sterling.
  • Mark Carney appears to be the only person with a post Brexit plan and his plan is to cut interest rates by ¼%, which in the old days would have been considered derisory but nowadays it is the only game in town. He has also said that banks and mortgage companies need to be more stringent with the applicant’s unassailable proof of ability to pay, which seems obvious but maybe not.
  • Mortgage rates are reducing and some low fixed rates are now on offer.
  • Meanwhile in Derby, a long, long way from the stratospheric heights of London and Westminster, the local student market is going through some of the most turbulent times we can remember with a lot of external investment funds pouring into the Purpose Built Student Accommodation (PBSA) market.
  • All this means uncertainty where the smaller landlord will probably sit tight and wait and see what happens. Certainly first time Buy to Let buyers are having more of a problem with obtaining mortgages.
  • So with trends moving the student market towards modern en-suite bedrooms, closer to the campuses and town means that probably small, old terrace houses away from the preferred locations will struggle and their values as an investment property will decrease whatever happens in London, Brussels or Strasbourg.
  • Finally if you are thinking of increasing your property portfolio make sure what you have is in the right location and before buying more is your present portfolio of the right standard to meet the new demands of the market and weather the growing competition. We would be happy to advise further on this. Please do get in touch.

William Barron, Blue i Properties, July 9th 2016
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