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Potential Brexit stalls property market

8 June 2016

Potential Brexit stalls property market
With the referendum on a potential Brexit just under three weeks away, the property market in Britain and especially London is bearing out the result of the uncertainty.

In fact, news agency Reuters announced this week that some property investors had included clauses in their contracts that buyers could walk away from a deal if the country decides to leave the EU on 23 June.

Some clauses also actively devalued the property in the case of a pro Brexit vote by as much as £1m.

According to Reuters, Brexit clauses are now particularly common among foreign investors, with half of 24 law firms the agency spoke to saying they had used such clauses in the recent past.

Property sales have gone down significantly not only in London over the last few weeks, coming immediately after the recent surge before the introduction of Stamp Duty in April.

Rob Wilkinson, chief executive of AEW Europe, says that international investors looking to build a portfolio are either holding out or adding a Brexit clause at the moment, according to Reuters.

Uncertainty about the outcome of the referendum and various sinister predictions of what the British economy would have to face if the country voted to leave the EU have played a key part in the fall in activity in the market.

While politicians and the British public are still arguing about the risks and benefits of a Brexit, the property market is already struggling under the effects of the referendum.