Ahead of the referendum in June that will decide Britain’s membership of the European Union (EU), many Asian investors eyeing investment opportunities in the UK property market have opted to temporarily close their wallets.
“It hasn’t come to a halt, but it’s been slower in the first three months of 2016 compared to a year ago,” David Green-Morgan, global capital markets research director at JLL, said of investor interest from this part of the world.
According to figures provided by JLL, transaction volumes for residential property in the UK totalled 10.4 billion pounds (US$14.83 billion) in the first quarter of 2016, down 32 percent from 15.4 billion pounds in the same period one year earlier. Commercial property similarly saw a 35 per cent on-year decline in transaction volumes.
“There’s a sense of nervousness from both the buyer and seller’s sides because it is unquantifiable what a ‘Brexit’ would mean for the UK economy,” Mr Green-Morgan added. “It’s so complicated that you can’t put a finger on which way things will go, and this uncertainty is what investors hate the most.”
Since the announcement of a crucial referendum on Jun 23, opinion polls have suggested that voters remain split on whether Britain should exit the EU and analysts have repeatedly sounded alarm bells over how a “Brexit” could send a “serious shock” to the UK’s economy. Prominent figures such as International Monetary chief Christine Lagarde also warned that a British pull-out from the politico-economic union will pose risks for an already-weak global economy.