After citizens of the United Kingdom voted in a late-June referendum to leave the European Union (EU)—"Brexit" as it’s widely become known—some have worried about the immediate economic impact the vote would have on the country. U.K-based architects and designers, for one, wondered how leaving the EU would affect their businesses and the potential end of access to the "free flow of talent" between Britain and the European mainland.
But what about real estate? In London, a hotspot for foreign real estate investment, it seems at least one development has seen its value diminish as a direct result of the Brexit vote. According to the Wall Street Journal, the value of Earls Court, one of London’s largest luxury residential projects, has fallen 14 percent since the Brexit vote, to £1.2 billion (just under $1.6 billion) from £1.4 billion at the end of 2015.
This shrink in home prices, even at the largely protected luxury end of the market spectrum, isn’t entirely unexpected:
Even before Brexit, prices for high-end homes in central London had been falling in part due to shrinking demand from global investors and a raft of new taxes.
In July, London homeowners perceived that the value of their homes had fallen for the first time since October 2012, according to a survey from property broker Knight Frankand data firm Markit.