Cogress Video Interviews
Lord Mendelsohn, Member of the Cogress’ Advisory Board discusses the current state of the UK property market and the key factors resulting from the triggering of Article 50.
In your opinion, what will be the key factors resulting from the triggering of Article 50 that could affect London House prices?
The main issue affecting the house prices in relation to Brexit has really been around uncertainty and that’s our biggest problem. Most of the major changes to the position of property in London are the costs that relate to the tax changes that the government has brought in which is heavily taxed property its also being the issue about house building, supply and demand and where there has been limiting supply and sometimes an over demand at certain times. But in Europe the main issue is the uncertainty that has brought on the concern about investment in London, but that has always been tempered by the fact that London is a very strong investment bet and we have seen that in the market we have seen some resilience in the market as a result of it. Brexit in an of itself is not a cause for any concern about the property market but uncertainty is always a drag and has a debilitating impact on prices.
What will the government be doing to ensure that demand for living and working in London will at least remain at current levels and if not increase?
The impact of people’s willingness to live and work in London as a result of Brexit and the obvious concerns that some people have particularly the EU citizens who are residents here is the major concern about the condition of the London economy it’s overall impact on house prices is not clear and is not clear how strong it is. But obviously within the context to the Brexit negotiations, the rights of the EU citizens in Britain and of British citizens in Europe is a key factor and of course one would hope that a less dryer and some accommodating view was taken to make sure that we will be able to have arrangements that would satisfy both and would give special terms to both almost as a form of continuation of where we are. Whether or not that is a realistic prospect to expect in the negotiations remain as to be seen and the indicators are not as optimistic as some would like. But that’s the way in which we can make sure we can guarantee a strong base for London and a stronger appeal to EU citizens.
With the devaluation of Sterling helping to buy Foreign investment into London, how will the government ensure that foreign funds continue to see the London property market as a safe haven for their investment?
The position of foreign investment in London is a very interesting story we are actually starting to see increasing foreign investment across the United Kingdom in the south-east, in other cities like Manchester and even Liverpool. Factors which haven’t really been as strong historically as they are at this moment and that’s because continually and partially because of the drop in the value of Sterling investors still see a major opportunity in holding asset and holding property both on an income basis and on an asset basis that the UK remains very solid and very strong. There is of course some areas in London where there has been an over-supply and some development and I would say that areas like Nine Elms are where there is a great risk and we have seen a real chill in overseas investments in those sorts of areas but the general story of property in the UK is that foreign investment still remains very very strong and that has been strengthened by Sterling.