Property development sector reacts to Brexit

Property development sector reacts to Brexit

The outcome of last week’s EU referendum is set to have a major impact for developers and housebuilders, according to two leading trade associations.

David Cox, Managing Director of The Association of Residential Letting Agents (ARLA) and Mark Hayward, Managing Director of National Association of Estate Agents (NAEA), issued a joint statement saying the vote was a major concern for buyers and renters.

“The outcome of [last week’s] EU referendum will create a period of uncertainty among homeowners, buyers, investors, landlords and developers. 

“We can expect international investors to look a lot harder at the UK as a market; this will have a consequential impact upon the housebuilding sector as investment may be stalled.”

Russell Quirk, CEO of eMoov and former Brentwood First Party councillor, said we should respect the vote, but still expects to see growth in the housing market.

“Many will be running to their nuclear bunkers now that the apparent end of the world is nigh.

“But before they do, they might want to take a breath and sit tight.

“Going forward, the UK market will go from strength to strength, perhaps with wobbly knees [as] it emerges from the clutches of the EU, but it will soon find its feet again.”

Bob Sturges, Head of PR and Communications at Fortwell Capital, said the panic from the immediate aftermath could be ignored for now.

“Not only was it anticipated in the event of Brexit, but it was made far worse by the complacent assumption of market-makers that the UK would vote to remain.

“They got it wrong – not for the first time – and so scrambled to cover their well-padded backsides as best they could.”

Janine Lewis, CEO of InvestSure, felt that Brexit was little more than a red herring when it came to the property market.

“Irrespective of the vote to leave, British property will continue to be an attractive destination for foreign money.

“The UK property market can either succeed or fail both within and without the EU – it won’t make a difference.”

Ashley Ilsen, Head of Lending at Regentsmead, added that the slow process of the leaving the EU would allow the markets to settle.

“Going on from here is a huge leap in the dark for our economy and our society, which will require a lot of trial and error from our future leaders.

“The upshot for developers and the housing market should become clearer over the coming weeks, but it seems quite likely that we will enter a recession which will significantly impact the housing market.”

Mark Posniak, Managing Director of Dragonfly Property Finance, also felt it was impossible to know the full ramifications of the Leave vote and felt the structural supply issue underpinning the UK’s property market could prevent the prices falling.

"Overseas demand may also increase on the back of the decimated pound. For many overseas investors, buying British property just got a lot cheaper.

"Short-term liquidity issues are possible, if not likely, among bank lenders and non-bank lenders that have bank funding lines.

"In the days and weeks ahead, banks and every other type of lender will be monitoring events forensically.”

Bob concluded by seeing a lot of positives from the vote adding: "I sense, too, an opportunity here for lenders.

“The big banks will be profoundly affected by Brexit.

“This is likely to shrink further their already sparse appetite for risk.

“As they retreat to review their options, fast-moving entrepreneurial funders will have a golden opportunity to fill the gap they leave behind."

On 25th July the property development industry called on Theresa May to ease planning restrictions.

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