Agate Freimane, Senior Investment Director at BrickVest, said: “Since the Brexit vote, the Bank of England has cut interest rates and boosted quantitative easing. The latest GDP growth and inflation numbers show signs that these measures have worked and if this trend continues, the Bank of England will start to raise interest rates, which is likely to have a negative impact on real estate. Higher inflation means higher construction costs, leading to an increase in real estate prices. However since Brexit, the demand for real estate has softened and it is unlikely that developers will immediately pass on the higher inflationary costs to the end customer.
“Since the Brexit vote in June, we’ve seen a 72% increase in the number of investors joining the platform. We expect to see the highest level of volatility from the office sector as many international firms currently headquartered in the UK may put decisions on hold over their long term office space requirements. Indeed our recent research showed that 20% of property-focussed institutional investors believe the office sector will present the biggest European real estate investment opportunity over the next 12 months. If the UK no longer gives businesses access to the European market, they may need to spread their staff across multiple locations to more efficiently access both the UK and European market.”
