Brexit to delay half of London commercial property
Up to half of planned commercial developments in central London could be delayed over the next few years due to concerns about Brexit, and overall investor returns will be flat in 2016, estate agents Savills said.
Savills said that across Britain there could be a decline of up to 40 percent from 2017 until 2021 in development activity of retail, office and industrial property, with up to 50 percent delayed in central London.
“This would definitely be Brexit-related – a mix of lender, developer and occupier risk-aversion,” Head of Commercial Research Mat Oakley told.
“We were forecasting a declining total return more than a year ago, but Brexit has resulted in a sharper than expected correction in capital values,” said Oakley.
Demand for luxury homes in central London, where a high proportion of buyers are foreign and domestic investors, has also been hit in recent months due to increased property taxation and the uncertainty created by Brexit.
Consultancy Knight Frank said that a 4.8 percent fall in prime central London house prices in November was the steepest drop in just over seven years.
Prices in the capital’s most desirable postcodes, ranging from Knightsbridge and Belgravia to Notting Hill, have recorded ever-increasing annual falls in recent months with prices expected to be flat next year.