ORLANDO – Despite the uncertainty created by the Brexit vote, residents of Britain are unlikely to lose interest in the value of a second home in the Orlando area, said the director of one of the top real estate associations in London.
Nick Churton, the managing director of Mayfair International Realty, said Brexit won’t alter the desire to own a home – or to invest in a second home.
“Ambition or dreams of home ownership in other countries is not dictated by political or economic events. But they are affected by them,” he said.
Across Europe, people are still trying to figure out the long-term impact of a referendum in June to have the United Kingdom leave the European Union after 43 years. The referendum was approved by 52 percent of British voters.
Since then, the value of the British pound has taken a steep nosedive.
“Clearly the weaker pound against the dollar and Euro will mean that for a while at least, Brits will want to take stock,” Churton said in an interview with Freeline Media.
Churton added that these fears are not likely to last.
“The new reality will soon become the norm and buyers for investment or lifestyle purposes will, no doubt, be heading online to study the real estate market and make plans,” he said. “If the U.K. interest rates are reduced further, then capital will be placed into more assets that can provide a better return either in financial or pleasure returns — or both.”
Britain’s interest rates have been at a historic low of 0.5 percent since March 2009, well before the vote to leave the EU was cast on June 23.
The Bank of England is expected to cut interest rates again this month, to head off a potential economic slowdown caused by Brexit, with rates possibly falling as low as 0.25 percent.
That’s likely to help sales in the U.K., Churton said, drawing more first-time buyers into a market in London that has been stalled by high home prices and high taxation.
British interest in homes in the U.S., including in the Orlando area, are most likely to be impacted by what is happening politically in the states, Churton added.
“British home ownership in the U.S. is, in fact, more governed by politics in America than in Britain,” he said. “While the U.S. continues restricting U.K. retirees from year round occupancy, locations like Orlando will find it challenging to compete for the grey pound with other destinations such as France or Spain.”
Churton said despite the Brexit vote, he doesn’t expect British buyers to have trouble purchasing a home in other parts of Europe.
“It is hard to conceive that, despite the Brexit vote, there will be any restrictions placed on Britons purchasing property throughout the European Union,” he said. “With over two million Britons living in Spain alone, the revenue this brings is substantial and helps to support the local and national Spanish real estate market. It would be naive to damage this cash cow any more than it would be for the Germans to make it more difficult for the British to buy their cars, which account for up to 20 percent of their overall annual sales.”
Founded in 1995, Mayfair International Realty is a UK-wide network of independent real estate brokers in England, Scotland, Wales and Ireland. In 2005 this group was expanded to North America, and brings international real estate marketing to a worldwide community of buyers and investors.
From a real estate perspective, Churton said, high taxation levied on foreign investors looking for homes in London is far more problematic for the housing market than Brexit.
“As far as London is concerned, Brexit is perhaps not so much an issue as taxation,” he said. “Higher U.K. taxes were levied recently on foreign real estate buyers and also domestic buyers purchasing additional homes. This has had two marked effects on the U.K. property market. The first is that foreign investors — already turning to other locations because of London’s spiraling real estate values — have discerned better returns elsewhere.”
At the same time, he added, “The U.K. capital continues to attract the world’s uber-rich through its culture, art, food and inclusive and cosmopolitan lifestyle. In fact, the weakening of the pound gives London a boost as an investment magnate. Middle market domestic investors may well be tempted to capitalize — thus putting downward pressure on prices.”
Michael Freeman is an Orlando journalist, playwright and author of the book “Bloody Rabbit”. Contact him at Freelineorlando@gmail.com..