And so it has come to pass
THE dirty deed is done. Britain has invoked Article 50. And the question I’m pondering is who is set to gain from this? The gloves are now off and the hard bargaining begins. The UK will remain in the EU until 2019 at the earliest with many years to follow before trade restrictions will be fully implemented.
Since the vote was taken, UK-based investors in Irish property have all but ‘left the building’ as they monitor how the situation evolves. And the main Irish property groups have not hosted their usual exhibitions in London this spring.
In the UK, figures recently published confirm that transactions year-on-year are down by up to 20pc in the London area. An additional disincentive was the introduction of the 3pc stamp duty for second properties last April. London is the most-affected area — values have hit a plateau and, in some of the more exclusive areas, are even falling. Yet since 2014, London values had increased by 10pc a year.
It’s difficult to assess whether this cooling off can be attributed to Brexit or is a natural adjustment following a prolonged upward movement in values.
In the rest of the UK, values have been less affected with average increases of 5pc experienced over the last 12 months. Areas outside London had experienced lower increases in value over the previous three years.
The UK, like Ireland, is also experiencing a significant shortfall in supply, therefore domestic demand is likely to be the sustaining force over the next 18 months. Closer to home an essential cog in the wheel for our property market will be the retention of an open border between the North and south. One positive is the fact that PM Theresa May alluded to its importance in her ‘letter of resignation’ to the EU. Based on the initial response from Brussels, it seems the feeling is mutual.
The reintroduction of a hard border would have a negative impact for property both North and south, and would be a backward step, significantly restricting the movement of people and their living options.