Property investment could surge if UK stays in EU

Bobby Hellard

June 13, 2016

EU Brexit European Union

Voting to stay in the EU could see a surge in investment in the UK property market in the second half of this year, according to Kames Capital.

David Wise, investment director at Kames Capital, believes that whilst property investment has been hard hit by the uncertainty caused by the impending referendum ‘wait and see’ investors could give a much needed boost if the UK votes to stay.

He said: “Everyone is concerned about the Brexit vote but no one is asking what happens if we vote to stay in the EU.

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“Thus far the uncertainty over Brexit has caused the market to slow down in terms of transactions, with a wait and see attitude among investors, but we could see a strong second half for property after the June vote for this reason, if the UK stays in the EU.”

Year-on-year investment volumes are down by nearly a third in the first quarter of 2016 as investor confidence in a sector which has also seen strong capital growth has started to wane.

The impact has been felt most keenly at the larger end of the market with the £20m-plus properties, which tend to be in London and the South East, the worst affected as they would potentially see the greater impact of an exit from the EU.

However Wise believes that while there is a tendency among international investors to concentrate on the London and South East market, there are a number of opportunities outside the most popular regions.

He added: “A lot of international money remains focused on London, but there are advantages to taking a different approach.

“Smaller lots, particularly those in the regions between £5m and £20m, can offer the prospect of superior returns and better liquidity for our clients.”