text: For both residential and commercial property, there will be short-term market volatility. Potentially, and in selective instances, pricing could come under pressure
  However, for both residential and commercial property, the long-term market dynamics remain unchanged. Low supply will continue to be a day-to-day market reality
  The referendum result will have far-reaching repercussions for the UK and indeed the global economy and property markets, argues James Roberts.
  One of the first outcomes from the result of the referendum is that the value of the pound will inevitably fall in the near-term, as will the stock market. The chances of a technical recession, as business investment is curtailed, is high, and exporters and financial services firms will be at the forefront of the downturn.
  In the light of the above risks we expect the Bank of England, seasoned by the experience of Global Financial Crisis, to respond quickly. An interest rate cut of 25 basis points is a strong possibility at the Monetary Policy Committee’s July meeting, or perhaps earlier if required. We may also see a return of quantitative easing if there are signs that investment is deteriorating. This should in our opinion help restore confidence as the summer progresses.
  Unemployment is a lagging indicator, so any job losses will take time to filter through to the statistics. Similarly, any inflation driven by the pound’s devaluation will probably come through later.
  Consequently, we see the effect on the UK as consisting of a high-speed mini-economic cycle. In the coming weeks, a combination of falling sentiment and those investors who are over extended having to sell will result in some disposals which will be likely to weigh on asset prices.
  This we see coinciding with a devaluation of the pound. The combination of lower prices plus exchange rate effect should then draw in overseas investors looking to acquire assets in the UK, attracted by a G7 country with a track record of achieving strong economic growth.
  The re-emergence of inflation, resulting from the devaluation, will in our opinion push investors towards growth assets later this year or early next. Also, in the coming months, more indication will emerge on the future direction of the UK economy. Consequently, we believe asset prices for the more robust sectors could be back to roughly where they were pre-referendum by summer 2017.
  Ultimately, it should be remembered that the UK is a country with 60 million wealthy consumers and a high skill workforce. Consumer goods firms like Coca-Cola and BMW will always want to access a market this big. Skills based employers like PwC and Google will always want to access such a large pool of talented workers.
  The underlying strengths of the UK economy remain in place, and ultimately real estate is an investment that works best for those who pursue long-term goals.
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