Two weeks after the UK voted to leave the European Union, which led to an immediate drop in activity at several major auction houses, some auctioneers are seeing an upside.
AHL director and auctioneer Andrew Binstock wrote in a note to investors last week: “While the results from the referendum are not to everyone’s liking, the upside for UK property sellers is that the weak pound will almost certainly see an upsurge in overseas investors entering the market over the next few months.”
Acuitus chairman Richard Auterac agreed that more international investors were accessing the market via the auction room and that this trend could be boosted by a cheaper pound.
He said: “Most overseas buyers have long-term investment strategies. They are likely to see political and economic uncertainty balanced out by a weaker pound, which will make their purchases cheaper in real terms.”
But he warned that the sector was entering uncharted waters and only the results in the room would give a true indicator of investor sentiment.
The pound has fallen sharply against the dollar and the euro since 23 June and on 6 July hit £1.28 against the dollar – a 31-year low.
“This does make UK property look cheaper than it was a few weeks ago,” said Strettons director Philip Waterfield.
But he questioned whether overseas investors would want to invest in the UK while there were still doubts over whether it would retain access to the single market after leaving the EU.
“If we don’t, then I think we will see a decline in overseas investment, as companies will no longer see the UK as a gateway to the EU and will be put off by the prospect of tariffs,” he said.
Waterfield also warned that there was the threat of disillusioned UK property investors looking elsewhere.
