The United Kingdom is going to vote on whether the country is going to keep its membership in the European Union or leave. As June 23 is approaching, uncertainties are looming in different sectors in the U.K., and the real estate is no exemption.
Recent data from the Royal Institution of Chartered Surveyors (RICS) showed a steady decline in global investments in the U.K. driven by fears of a Brexit ahead of the EU referendum in June, The Guardian reported. Demand for commercial properties such as office spaces, industrial properties and retail units has been slowing down as international companies are planning to relocate their headquarters should the U.K. decided to give up its EU membership.
Citing the data from Real Capital Analytics, The Wall Street Journal reported a 43 percent plunge in U.K. commercial property transactions volume in the first quarter at £10.9 billion from a year earlier. Only 5 percent of RICS members saw a 5 percent increase in interest among global investors in the first quarter of the year; last year, the interest was at 36 percent.
The decisions among international companies to stall their investment in the country would drive the demand for commercial real estate down and consequently, supply will increase and push prices up. London would be one of those which will greatly be affected. Commercial property transactions volume in London were already down 47 percent to £5 billion, according to the WSJ.
The Guardian quoted Housing and Planning Minister Brandon Lewis, saying, "We have a strong and growing economy but as this report shows major international businesses are postponing investment because of fears of Britain leaving the EU. On 23 June there will be a clear choice between economic security and global influence in remaining in the EU, or a leap in the dark and further uncertainty."
