Consumption and the property market
In this section, we look at the likely effects of Brexit on consumption and the British property market. We start by focussing on the property market impacts. First, we look at the concern that Brexit could harm Britain’s status as a commercial gateway to Europe, negatively impacting property markets. Second, we examine whether Brexit would adversely affect property demand through damaging the City of London. Finally, we bring together the property market analysis with our assessments of the other macroeconomic impacts of Brexit to evaluate the impact on aggregate consumption.
Foreign direct investment and the British property market after Brexit
If Britain lost its free access to the single market, there is a worry that this could rapidly change the country’s status as a commercial gateway to the rest of Europe, with adverse consequences for both occupier and property investment markets. If demand from overseas buyers did drop following Brexit, the impact on the market could be significant. After all, by value, overseas buyers have accounted for roughly half of all transactions in the British commercial property market over the past few years. (See Figure 27.