Despite Brexit the UK Real Estate Markets Continue to Show Signs of Resilience

Despite Brexit

Despite Brexit delays and political turmoils in the country, UK's capital city continues to attract investments from the Middle East buyers as the buyers from the region view the post-Brexit market as a buying opportunity.

The Arab buyers and the buyers from African nations are attracted to UK property due to the relative weakness of the pound and value correction in the market, where some of the most expensive property is now available at lesser rates.

Even though the demand is low, on the whole, in most markets, even the supplies are declining.

As per the RICS survey, there is a balance between the decline in new buyer inquiries and the rise in the inquiry. Sellers are holding on to property due to higher transaction costs as they will have to pay more stamp duty for a new purchase.

The increase in stamp duty and sale instructions has been depressing the markets. According to RICS, the five-year desire for rental development expanded to 3.6% yearly; previously, it was at 2.7% yearly.

Overseas Demand Continues to Grow

As per Savills research, the condition of no-deal Brexit hit the entire UK where the devaluation in sterling and the subdued markets have created opportunities for the overseas buyers who may have to pay less, even in the conditions when the stamp duties have been increased.

Several Middle East buyers have been seeking opportunities in the London property, which are believed to be a great prospect due to medium to strong long-term fundamentals where the rents continue to increase; also, there has been a historical trend of bouncing back in the market following a correction.

According to the reports by the firm Knight Frank - a total of $3.3billion was poured into the markets in London real estate in 2018 by the Middle East HNWI- high net worth investors.

Real Estate UK

Political issues and instability created by many geopolitical factors have Middle East buyers widely affected the Middle East.

The transportation facilities from the UK to the Middle East have improved in the last few years, and the young investors from the region want to get a visa to the UK and spend their lifetime in London.

Some experts believe the inquiries regarding such property have increased in certain categories post the UK referendum.

Several buyers in the Gulf are unaffected by the impact of Brexit or market conditions, and certain other factors are contributing to the consistent demand from the Middle East – the stable local government, security, and the education that seems to attract such investors.

Overall, the UK price had slowed since April 2019, when the average price growth stagnated. Nevertheless, despite Brexit uncertainty, the markets remain strong, showing signs of resilience amid multiple challenging situations.

Additionally, local demand continues to grow in markets like the West Midlands and North West due to low unemployment and lower interest rates.  

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