Whip out the calendars (or load up your phones we should say) and get that date jotted in – 23rd June 2016 – it’s nearly time for the big one. The team at Clark Weightman have been keeping a keen eye on the ‘Brexit’ developments for some time, and it’s fascinating to see how diverse the response has been. Of course, for the sake of unbiased clarity we are going to keep our personal views reserved – a decision we share with our professional body, RICS, who are maintaining a neutral position. We feel the most pressing issue to cover is how the result would affect the property market, and in our case particularly – commercial property.
Since the referendum began infiltrating peoples’ everyday conscience, a tangible number of investors have evidently taken a step back to await the results. The same behaviour could be seen in the lead up to the Scottish referendum in 2014 – a political tear which divided the country by a near 50/50 split. A number of people in the property sector have warned that the lead up to Brexit could be more damaging than anything post-vote due to the drop off in foreign and national investment.
On one hand you have the FT reporting that “London office investment” has dropped by 52% as well as Band of England governor Mark Carney warning that problems within the market, trade deficit, and company performance are beginning to manifest. There are of course those taking a level-headed approach and offering a ‘wait and see’ mentality to counter anxiety and negativity. Property analyst Richard Donnell says “If we vote to stay in, it’ll be back to business relatively quickly” as well as offering a comforting notion that he can’t see “long-term fundamentals shifting” as a result of Brexit because property prices are “largely informed by people’s incomes”.
We are very mindful of the significant investment the renewable sector plays in our region – for example, both Siemens and Dong Energy act as major players in our local economy. Similarly with the sheer volume of business trading through the Humber ports, we can’t lose sight of the significance our European neighbours lend to our wealth and prosperity. That said we hear and understand the arguments over sovereignty and decision making.
We remain concerned that the Brexit debate will turn into a personality contest between the main protagonists and that the decision to vote yes or no will be based on personality rather than facts. This isn’t a high stakes version of Britain’s Got Talent.