United Kingdom

Brexit pulls UK non-listed house funds down in the market

When the UK decided the leave the EU it sparked a tight fall in the activity coming from the UK non-listed property market, which leads to a sharp fall in house funds.

According to Inrev, the European association that represents investors in non-listed real estate vehicles, during 2016, the UK non-listed property funds delivered an average of a 2.2% return, down from 12% in 2015. The property funds analysis that came in has juxtaposed on a big scale compared to Germany, France and the Netherlands.

The Dutch market has seen its best yearly performance with returns of 14% last year, up 9.6% in 2015. This means that the Dutch market is strong at the moment and a lot of property investors are monitoring the Dutch housing market’s performance.

Continuing from Inrev’s findings, they have covered 339 non-listed property funds across Europe with combined assets under management of €213.6bn. As it stands, the UK represents under a third of the assets held in these funds, which shows that they are the largest market in Europe. People have been anticipating the UK housing market, but really, it offers nothing but guaranteed returns on investment.

According to an official source, investors who have moved into central European property funds in preparation of rising demand for office space for banks, insurers and asset management have moved some of their working operations from the UK. A lot of them have witnessed a rising investment interest in the European real estate market, despite the curiosity and anxiety of working within the entire Brexit situation. The uncertainty is evident but it is about property investors obtaining that level of faith that will enable them to pursue the property movements that they desire.

Concurring from a senior Deutsche Bank executive, he has cautioned that 4,000 staff based clients in Britain could be forced to move to keep serving EU-base clients if the UK were to lose access to the European single market,

The rent payments for London offices are dropping and are likely to drop even more if investment banks move their staff overseas because of Brexit. Equally, rents for retail properties have been falling as consumers have been using the Internet more and more for their personal needs.

House funds may be fluctuating but it doesn’t really determine the outcome of the real estate market in the UK. It is very unpredictable at the moment, but all that matters is how well involved a property investor is.

The more a house buyer or a property investor knows about the international housing market, the more than one can predict. House funds undoubtedly go up and down, but sometimes all it requires is patience, and the benefits shall be witnessed and more importantly, greatly rewarded.

Written by Gemma Smith

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