The skyline of London has been reshaped by the thriving financial services industry. The last few months, however, have witnessed tremors in London real estate due to Britain's impending exodus from the European Union. Many are afraid that Brexit will result in the loss of a significant number of financial sector jobs. All these will have a negative impact on the property market. To understand what is going to happen, Reuters have modeled a Brexit tracker. This tracker monitors a few indicators to assess what the economic future of the city looks like. The tracker's initial edition show that the economy could be in a slow down. There, however, will not be any trans-formative decline.
Mostly positive outlook
One indicator displays that the prices of commercial properties have dipped much more from the time of Brexit vote when contrasted against changes during the worldwide financial crisis from 2007 to 2009. The vacancy rates are also seen to go up by a nearly negligible margin. Real estate analysts, however, say that overall, the real estate scenario can be described as positive. This holds true even after much selling occurred post the 2016 Brexit vote. Analysts have pointed out the renewed leasing activity in the City of London. Leases went up by about 17 percent during the initial three quarters of 2017 over a long-term average. Tenants have committed to London at least until the earlier part of the 2020s.
The mood among real estate investors continues to be volatile. A bold dividing line continues to exist between the bears and bulls. It is observed that more pessimism is being seen among domestic investors when it comes to the future. Investors from outside the UK are generally positive. The London real estate market has been under the control of the non-domestic investors. The latter has made 80 percent of the total investment so far.
Businesses are not expected to leave London for the time being. They are focused on earning money. To do this, they must keep their employees happy. Workplaces must also meet a certain standard. It is thus apparent that a substantial sum of money has been spent on making contingency plans and all of these means that businesses are staying, at least for now. Most analysts believe that the talk of job losses in thousands are simply not happening. There could be a few job losses over the period of the next five to 10 years.