After much debate and speculation, history was made when the UK people voted to leave the European Union. This came as a shock to many people.
No one really knows what the full impact of this decision will be. Apart from the predicted immediate impact this had on the strength of the pound and the stock market, we may not see any significant changes for a few years whilst the details are worked out.
There will be no immediate shift in the UK’s status within the EU while negotiations begin to plan next steps. The government will move quickly to calm the market, using every lever to encourage continued investment and maintain economic growth in the medium to long term.
In the short-term, many foreign investors are moving fast to capitalise on the current FX volatility to purchase competitively priced assets in the UK.
So what does this mean for the property market?
You could argue that the UK has suddenly become a more attractive place for foreign investors to purchase because they will get more for their money. However, it is important to remember the fundamentals of the UK property market which are that there is a shortage of supply. This is because we live on an island, with a limited amount of accommodation, and an increasing population. We simply do not have enough accommodation currently or the pipeline to satisfy demand growth, so over the long term values and rent are most likely to continue to rise.
Even if we immediately shut the borders and did not let anyone else into the UK, the number of households is still predicted to grow due to increasing birth rates,longer life expectancy and smaller household sizes. It is unlikely that EU workers who are living and renting in the UK will suddenly leave because they are here for a reason.