STAY CONNECTED!
    
newsletter-button

TODAY'S OTHER NEWS

MPL
Bank says Brexit could contribute to 20% fall in high-end new home prices

Morgan Stanley says fears over a possible UK exit from the EU and other global economic uncertainty could lead to “a 10% to 20% fall in new-build high-end residential pricing in 2016” with prime central London most likely to suffer.

The bank’s forecast - contained in a market note to investors on Capital & Counties, the developer of the new 7,500-home Earl’s Court scheme - includes the statement: “We worry about lower demand from unlevered buyers and more selling from levered buy to let investors from April owing to changes in buy to let taxation, at a time when we are nearing the Brexit referendum.”

Although the note suggests the London new build sector will recover in the long term, a report on the Morgan Stanley warning in London’s Evening Standard free newspaper says sales on the second phase of the Earl’s Court scheme have “ground to a halt ... since November.”

The article also quotes London Residential Research, a consultancy operated by property publication Estates Gazette, as saying that sales of new-build apartments in prime central London were down 47 per cent in 2015.

Trevor Abrahamsohn of the agency Glentree Estates is quoted by the Standard as saying: “Asian buyers from Malaysia, Singapore, Hong Kong and China are walking away from their commitments to buy properties in, for instance, east London and Nine Elms. The changes to buy-to-let tax is the ‘straw that broke the camel’s back’.

“In pockets of London’s newly developed areas, where there is a lot of speculative development, the outcome could quickly turn nasty with buyers drying up, developers having to cut prices and investors dumping their newly acquired flats before construction of them has even finished.”

icon

Please login to comment

imgcollapse
sign up