Brexit 'clarity' brings Middle East demand for London real estate
5 February 2020
As the uncertainty over Brexit clears somewhat, following the United Kingdom’s official departure from the European Union on February 1, UAE buyers are already setting their sights on London’s real estate market.
According to the latest London Market Update from Dubai-based real estate outfit Core, the election of Boris Johnson as prime minister, followed by confirmation that Britain has left the EU, has been met with renewed optimism from Middle East investors.
The report said: “We are witnessing a rise in enquiries for prime central London properties from UAE buyers who have until now awaited clarity on Brexit.”
Latest data from LonRes shows Q4 2019 transaction volumes increased 34 percent year-on-year, with a particular spike at the upper end of the market - £5m-plus ($6.6m) transactions were up by 78 percent.
A significant rise was also recorded in the £2m ($2.6m)-£5m range - up 42 percent compared with the same period last year, while the sub-£2m bracket posted a 20 percent uptick.
Shift in dynamics
However, the report revealed a lack of supply in the UK capital, with the number of available properties on the market at the end of Q4 2019 19 percent lower than at the same point a year ago.
Alex Casaki, head of the London desk at Core, said: “We are starting to witness a shift in dynamics with seller’s confidence on the rise and we anticipate lower negotiating margins compared to what was seen during the peak of the Brexit referendum.”
According to the report, the extent of the pent-up demand that has built over the last couple years is expected to exert upward pressure on prices. While lower levels of supply volumes are forecast to continue over 2020 as sellers take a firmer stance on offers.
Casaki added: “With sterling expected to continue gaining upward momentum against the dollar, coupled with the potential introduction of an additional stamp duty surcharge for non-resident buyers in the upcoming budget, this is expected to bring forward greater interest for prime central London properties in Q1 2020 - with UAE buyers potentially capitalising on this window of opportunity.”
Kindly supplied by ITP Media Group
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