There appears to have been a run on property investment funds. Multiple large funds have suspended redemptions, presumably to prevent forced sale of assets to satisfy the demand for withdrawals from the funds. Is this good or bad? Well, on the plus side, it should protect values because there will not be a flood of institutional held property stock onto the market. On the other hand, one might say that sentiment has spoken and it is only a matter of time before that happens.
Widespread press comment that large commercial agents have put a total hold on all hiring and are actively considering redundancies. Unsurprising, given the likely slowdown in the transactional side of the property investment market.
The auction market seems to be holding. Allsop reported a strong auction in the week following Brexit. Perhaps this represents an opportunity f or cash rich investors to buy?
The residential market-well, anecdotally only, I perceive there to be a slowdown. Transactions have aborted and/or been renegotiated lower and many of my industry colleagues comment the same way. Mortgage rates appear to have come down, particularly long term fixes due to the lowering of long term swap rates. Perhaps this will entice buyers back to market?
Dealing and trading activity appears strong. I suspect there will be distressed opportunities as post Brexit time moves on and this should encourage the property trading market.
One interesting side story. We transact a good deal of lease extension work and have noticed a marked increase in enquiries for residential lease extensions. Perhaps those who were considering selling are now more likely considering extending the leases of their flats and ensuring they capture the value now to protect their value for the future?
Law firms? Already a number of law large city firms have reported reduced turnover or lower than expected growth and static profits. One has put a hold on all salary reviews. If Brexit bites hard, expect redundancies in the sector, particularly in the larger firms with heavy real estate exposure.
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