The UK real estate industry has met Theresa May's resounding Brexit defeat in parliament with a mix of optimism and trepidation.
'This outcome is certainly better than the deal that was on offer, that’s for sure,' said Guy Harrington, CEO of specialist property lender Glenhawk. 'The sooner it is taken off the table, the better. Hopefully any further negotiations with the EU will now be delayed, and ultimately Brexit cancelled,' Harrington added.
Other business leaders were more pessimistic.
'Whilst forecast, the size of the defeat is a real blow to the UK real estate sector,' said Mario Berti, CEO of lender Octopus Property.
'Whilst a lot of the uncertainty caused by Brexit has been priced into the property market, this result is likely to lead to even more reluctance amongst real estate developers and investors to move forward with their UK real estate strategies, which will negatively impact the whole sector,' Berti added.
Theresa May suffered a historic defeat in the Commons on Tuesday night as MPs rejected her Brexit plan by a majority of 230. No British prime minister has ever lost a motion by such a large margin in the last century.
The chancellor, Philip Hammond, expressed his 'disappointment' in a conference call after the vote with business leaders, including key UK chief executives, the CBI, and the British Chamber of Commerce. Several asked Hammond to rule out a no-deal Brexit moving forward, according to sources present on the call, despite parliament's ongoing refusal to eliminate this scenario.
Call for clarity
Commenting on the vote, Tom Brown, managing director of real estate at London-headquartered property firm Ingenious, said: 'What started in June 2016 as a political and constitutional crisis has, with time, spread into the wider economy. In response investors seem to be biding their time and waiting for greater clarity before committing their cash. This is reflected in property markets where transaction volumes have reduced on account of a mismatch between vendors and purchasers’ expectations. In the longer term, the UK will quickly re-establish itself as an attractive place to invest once confidence returns to markets.'
He added: 'What investors and business so urgently need is clarity for the longer term before markets can return to normal, which may be some time away. We’re sympathetic to those that think the Article 50 process should be extended to allow time for greater consensus to be reached on a cross party basis which will enable the UK to go back to the EU with a clearer account of what it wants. This now seems all but inevitable.'
The European commission president, Jean-Claude Juncker, acknowledged that uncertainty was taking its toll, urging the British government to 'clarify its intentions as soon as possible'. He added: 'Time is almost up'.
