Following the vote to leave the UK analysts are predicting that the price of a London office could fall by 20%. This news may not be as bad as it sounds for anyone looking for an affordable office in the city.
The fall in office prices is based on the assumption that there will be less demand for leasing office space if an economic downturn happens.
Another factor is withdrawal of investment from abroad, which is already happening. Commercial property investors have suddenly become more cautious about investing in the UK when it is set leave the EU in a little more than two year’s time.
Another reason for the gloomy prediction is that some businesses will relocate abroad if they feel that their needs will be better served on the continent.
One silver lining to all of this is that offices will be cheaper to purchase therefore more money can be spent on making improvements that will add value in the longer term.
It has to be remembered that the UK economy is fundamentally strong and it has more than enough in reserve to weather any future storms if they arise. Aside from a falling pound, there is little evidence of that storm arriving just yet.
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