A note to investors sent out yesterday by the international bank Societe Generale is warning that Brexit could wipe 30 per cent off the value of homes in London.
“While in recent stress tests, the major UK banks were assessed with declines of around 30 per cent in commercial real estate prices, we fear that London residential could experience an even more severe downturn,” according to bank analysts.
“Brexit will damage the UK economy, and some companies will almost certainly have to relocate parts of their business to retain access to the EU single market” it continues.
“We do expect the recent rebound in real estate stocks may ultimately turn out to be just a ‘dead cat bounce’” the bank claims.
There has been little unanimity amongst analysts as to the effects of Brexit, although many believe prime London will suffer because of its reliance on high-end international buyers.
Yesterday we reported that the average asking price for a house in the capital fell by 1.2 per cent over the last month according to Rightmove, but with central London prices dropping more dramatically - by 2.3 per cent in four weeks.
However, behind those averages many boroughs showed stark variations.
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French Bank scaremongering! I do not believe that is what will happen - at the coal face I am finding very different truths. Of course property has to be defined in separate parts. London property is the investor market, various residential markets, central, prime and super-prime. They are all behaving differently. And then of course the investor market is split between existing stock and new-build markets. These ridiculous postulations by some research teams are baseless and completely unfounded.
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