Falls in sterling following the UK's vote to leave the European Union have prompted some Middle East buyers to re-enter the British real estate market, according to property firm Savills.
The company also said in a statement that there has also been a fair share of speculative bids from Gulf-based investors hoping to secure a bargain.
“There have been conflicting signals in the market in the period post referendum, which suggests the impact of a vote to leave the EU will only become clear over coming months as the market finds its level,” says Lucian Cook, head of UK residential research at Savills.
“Falls in sterling have prompted some Middle East buyers to re-enter the market, while there has also been a fair share of speculative bids from those hoping to secure a bargain. Against this context, sellers have generally taken a pragmatic approach around pricing without having to slash their expectations.
“Prime regional markets are at a different stage in their cycle, having been slower to recover peak 2007 values, and therefore appear to have been less affected by pre referendum uncertainty.”
Ed Macura, Partner, Core UAE Associate of Savills, added: “In the short-term, Gulf investors are increasingly taking advantage of the devaluation of the pound as a result of the referendum. In the medium to long-term London's fundamentals remain intact, a growing population with an increasing housing shortage and a city lifestyle that is always going to be appealing to an international audience.”
Pre referendum uncertainty triggered further small price falls in the prime housing markets of London in the second quarter of 2016, according to latest research from Savills.
A marginal -0.2 percent fall in the three-month period prior to the referendum left average prime London values down -0.7 percent year on year, and -1.4 percent below their pre December 2014 level, when stamp duty rates on high value homes were increased.
Savills said falls were most pronounced in prime central London, where prices fell -1.4 percent in the quarter. This left values in London’s most exclusive markets on average -3.9 percent down year on year and -8.0 percent below their Q3 2014 peak.
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