What does Brexit mean for London property?

Almost 2 weeks after the UK somewhat surprisingly voted to leave The European Union, the dust is now starting to settle. Focus has shifted away from the merits of the decision and onto the implications, specifically how the UK will negotiate an exit. With a new prime minister and cabinet now in place, the fog of uncertainty is starting to lift and we can soon expect a timeline, and more importantly, a plan for every market to respond to positively. Looking at this specifically in the context of the London property market, the two questions all my clients are asking are:

  1. How much is my property worth now/should I be offering less for the property I was going to buy?
  2. How will it affect banks’ lending policy; will it now be harder to get a mortgage?

In very simple terms, the fact London property is so much more expensive than the rest of the country is a bi-product of straightforward economics. Demand has far outstripped supply for a number of years, resulting in a rise in price. So will Brexit affect this demand?

Essentially, the answer is hardly at all, although I would expect a shift in where demand comes from. Foreign investors and ex-pats are already showing huge interest in buying on the back of the drop in Sterling, countering any reduction from UK buyers thinking twice. My clients who were mid-way through a purchase after the result was announced, have all either completed or exchanged contracts with loans between £1,000,000-£2,000,000. Equally, even if demand reduces slightly over the coming months, it will continue to be much stronger than supply. With developers being hit particularly hard with funding lines post-Brexit, don’t expect a flood of new homes to increase housing supply in the short to medium term.

Considering the effect Brexit is having on lenders, the overwhelming message I have received from private, offshore, challenger and high street banks is the same: it’s business as usual. With a base rate cut from the Bank of England now inevitable, the cost of borrowing will hit a record-low. Undoubtedly this will stimulate demand, which after all, is the fundamental purpose of any monetary policy easing. Let’s not forget that banks need to lend to be profitable.

If demand for mortgages falls, whatever the circumstances behind it may be, lenders will always ease their criteria to attract business. In my view Brexit will be no different as banks need, and still want to, lend. So far from making it harder to get a mortgage, I expect quite the opposite for the vast majority of clients. This will encourage potential buyers to go ahead now, rather than adopting the herd “wait and see” mentality, which seems to be the standard media consensus.

Brexit will have very little, if any, effect on the London market in the medium term. In the short term lenders will continue as before and prices may stagnate but certainly not fall off a cliff (as speculated). London is one of, if not the most, resilient property market in the world. It always has and always will continue to rise significantly every 10-year cycle. Brexit may have slowed things temporarily, yet this represents a great opportunity to take the decision to buy or refinance now. Borrowing will never again be as cheap as it is now, and prices will continue to rise after a short period of flat lining. The time to make a move with your mortgage is now.

Blog by Phillip Clarke, Senior Mortgage Broker of Enness Private. Full article here.

Christopher Walkey

Founder of Estate Agent Networking. Internationally invited speaker on how to build online target audiences using Social Media. Writes about UK property prices, housing, politics and affordable homes.

You May Also Enjoy

Breaking News

Biggest property put-offs revealed by homebuyers

Biggest property put-offs could see homebuyers offer £40k less or more – From flying flags to aggressive dog breeds The latest research from Springbok Properties has revealed the biggest property put-offs that could see buyers offer as much as £40,000 less, if not more, leaving many sellers struggling to achieve their asking price in the…
Read More
Rightmove logo
Breaking News

Southern buyers benefit most from static house prices and lower mortgage rates

Ahead of the Bank of England’s interest rate decision at 12:00pm on Thursday, Rightmove’s analysis shows that buyers in London and the south of England are benefitting most from improved affordability compared to last year Across Great Britain, the average monthly mortgage payment is now £84 lower than a year ago: In London, buyers are…
Read More
Home and Living

Kitchen Trade Expert Shares Five Benefits of Fully Assembled Units

The UK kitchen and bedroom fitting sector is currently facing a number of challenges. The UK Trade Skills Index 2023 report revealed that 937,000 new workers will be needed in the construction and trade industries by 2032 to meet the demands of the sector, impacted by the widening skills loss posed by Brexit, an ageing…
Read More
Breaking News

Why are HMO numbers falling?

The latest research from COHO, the HMO management platform, reveals that despite little change in tenant demand, house share availability has dropped by almost -60% in some parts of England, raising the question of whether we’re seeing an HMO landlord exodus. COHO’s analysis of house share listings data* shows that in England, the number of…
Read More
Breaking News

Only 27% of homes have been fixed in a £1.8bn Govt programme

Report shows only 27% of homes have been fixed in a £1.8bn Govt programme, as red tape and asbestos keep thousands in the cold Thousands of homes will face another winter of fuel poverty due to a raft of failures as scheme to fix them hits buffers Hundreds of millions of pounds of allocated grant…
Read More
Breaking News

UK House Price Index for July 2025

The latest index shows that: – The average monthly rate of house price growth in July was +0.3%. The average annual rate of house price growth in July was +2.8%, down slightly from +3.6% in June. As a result, the average UK house price sits at £269,735.   Director of Benham and Reeves, Marc von…
Read More