What is Brexit and since when has it come to force?
Brexit stands for “Britain’s Exit”. In 2016, precisely on June 23rd, there was a nationwide referendum held whereby the citizens of UK voted and a majority of them wanted Britain’s’ exit out of the European Union and thus began a series of action which unceremoniously marked the Brexit with global markets melting and most of the UK market freezing, which eventually caused the British pound to slide 11% deeper which is the lowest that it has ever fallen in its history of last few decades.
The Prime Minister resigned:
The then prime minister, David Cameroon resigned when the result of the referendum was announced and his place was taken by the conservative leader, Theresa May. It may be noted that Cameroons’s government was for the existence of Britain within the European Union.
Britain was already out of the Schengen Agreement and way back in 2000 had already rejected the uniform currency Euro policy. Britain has a history of never sitting on the fence when it comes to describing its position in the world. In fact, when entire Europe adopted the Euro as its common currency, Britain dropped out and was consistently following its own currency namely the Pound.
Additionally, Britain also declined to become a party to the Schengen Pact which allows its Member Countries in Europe to share borders and to do away with the formalities of applying transit and visa documents for outsiders. Britain requires a visa to enter and a proper documentation that the UK embassy looks after. It has to be mentioned prominently here that Britain never ever has opened up its doors to the thousands of homeless refugees that brave terrible conditions to enter Europe from Syria. Britain has kept its gates closed with an iron fist and therefore there is nothing much the sufferers can do.
The fact that the decision was by a referendum of the local British people, it is scary to think that the people who were in majority and voted for the Brexit were actually thinking that the UK could as a single country handle everything by itself.
What are the adverse effects of Brexit?
Brexit impacted markets worldwide and across the board. Stocks and shares prices plummeted incorrigibly and then the British pound crashed by 11 % in one single day against the American dollar.
Impact of Brexit on the UK real estate market:
All the foreign real estate agencies including the prestigious names believed and reiterated the same views that Brexit has adversely affected the real estate market in the UK. The negative impact that it has caused to the market has left everyone wondering that what will be its long-term consequence.
Central London is hit the hardest:
Property projects that are finished and sitting on the block or the projects that are in their finishing leg are jeopardized. Their promoters are a nervous lot. The British exit from the union has raised so many questions on the future of the real estate of the country that a lot of people and foreign investment firms in a state of confusion and limbo as to the further course of action that they should adopt.
A knock out effect on property price was expected:
A big group of property experts was of a firm belief that if the foreign immigrants bought land or real estate in Britain before the referendum then there could be some knock out on the price. It may also be possible that stricter immigration laws and more strict money transfer rules may be employed by Britain to discourage the investment by overseas buyers and investors.
Property market hit hard:
Britain reported an all-time low in property demand and a severe slowdown in the sale price of existing real estate in the market. There were no new inquiries generated for a month following its infamous exit.
In April, there was a new law scheduled to be enacted that raised the stamp duty of the property in London and there were a lot of people who rushed to buy property and get it registered to save burdensome extra money on the stamp paper and corresponding taxes. Subsequently, with the referendum pending on Brexit, the UK property market went into a lull with signs of very small improvement that is seen now.
“A correction, not a crash”
Today four months since Brexit, the scenario is looking up and the markets are showing small signs of returning back to normalcy. Since there is a positive change at the investment level by foreign companies and banks in Britain, it has helped in re-imposing faith back into the system.