Residential market should recover

Commenting on the Leave result, Mark Weedon, Head of Research at Property Partner said: “In the short run, housing transactions in the mainstream market are likely to remain low, but the ‘stickiness’ of residential property may prevent house prices from actually falling, with the probable exception of London’s most expensive areas.

“Unlike other asset classes, far fewer people are willing to sell residential property in uncertain times, which in turn further reduces supply and eventually provides upwards pressure on prices. Through the oil shocks of the Seventies, the recessions of the early Eighties and Nineties, the bursting Dotcom bubble and the Global Financial Crisis, residential property outperformed all other asset classes – in addition to the attractive income stream it provides. During periods of volatility like this, investors tend to prefer assets which can provide a reliable income, combined with lower risk to preserve their wealth.

“Now more than ever, investments that bring in a reliable income will be highly prized. The net yields on our platform, for example, are up to ten times the Bank of England Base Rate. And of course, Brexit could lead to rates being cut.

“Looking further ahead, the fundamentals of the mainstream UK housing market should reassert themselves. With demand still far outstripping supply, house prices should trend upwards, albeit perhaps at a slower pace.

“And massive infrastructure projects like Crossrail, HS2 and the government’s plans for the Northern Powerhouse will go ahead irrespective of the Leave vote, improving connectivity and transforming neighbourhoods.

“However, prime central London – areas like Mayfair, Knightsbridge and Belgravia – looks more vulnerable. The hike in stamp duty for high value properties already hit these areas hard and Brexit will not improve confidence amongst the foreign investors who dominate this market.”