The UK electorate’s decision to leave the European Union in this week’s referendum has thrown all quarters of the property and construction industry into a state of uncertainty.
The property sector was bracing itself for early impact. Housing market analyst Hometrack said, “The immediate impact is likely to be a fall in housing turnover and a rapid deceleration in house price growth as buyers adopt a wait and see the short term impact on financial markets and the economy at large”. Allan Wilen, economics director of construction analyst Glenigan, said, “We expect investors to now reappraise their industrial and commercial property development plans in light of the vote. The London commercial property market looks especially vulnerable as many financial institutions need to be located within the EU.” The share prices of housebuilders and developers have suffered as the market has taken on board news of the referendum verdict.
Chris Ireland, UK chief executive of property consultant JLL sounded a more positive note, saying, “For property markets, the initial correction may be most severe but should be followed by an upturn as opportunities re-emerge in UK core markets and benefits of weak sterling are recognised”.
For cities and regions, however, the full implications have yet to emerge, said Alexandra Jones, chief executive of think tank, Centre for Cities. “There are massive question marks about how Brexit will affect cities which have historically relied on EU funding to strengthen their economies, as well as places which have been able to attract international jobs and investment, partly due to the UK’s membership of the single market”.