Vanessa Hale
Director, Research
Across both London and the rest of the UK, the immediate short-term effect of Brexit has been economic and political uncertainty.
That said, the appointment of a new Prime Minister has gone some way to alleviating general turmoil and both the FTSE and the FTSE 250 have recovered from their new immediate post-Brexit lows. Whilst companies appear to have adopted a wait and see mind-set for the short- to medium-term, London, and PCL more specifically, remain a ‘safe-haven’ for foreign investors as long as the outlook for the UK economy remains positive.
Infrastructure will provide new areas of opportunity. Paddington within the City of Westminster has been highlighted as a significant opportunity for large-scale redevelopment. By the mid-2000s more than 7 hectares of office development, 900 new homes and 1.5 hectares of retail and leisure spaces had been completed. In addition, major investors have gradually established headquarters in Paddington, including the retailer Marks & Spencer, the mobile phone company Orange and the life science giant AstraZeneca. We continue to see planning applications for new residential homes in the area.
Perhaps not surprising in the lead up to the Brexit vote, the Residential Report for the second quarter of 2016, shows lower transaction volumes as well as a slight decline in lettings in PCL. The continued subdued market demand is expected to result in PCL property prices continuing to decline for the remainder of 2016. However, it is expected that historic structural supply imbalances will continue to underpin pricing and prevent excessive falls in the near-term.
For further reading see the most current PCL Residential Research Report.