Is Brexit a luxury property opportunity?

Could UK's departure from the EU mean there are property bargains to pick up?

(Image credit: Carl Court/Getty Images)

The UK has voted to leave the European Union, a decision that has already hit the economy and had an impact on the retail property market.

Commercial property funds crashed down on the referendum result and economists expect the UK's eventual withdrawal from the bloc to slow growth or even prompt a recession.

But could it be good news for people looking to buy luxury properties?

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The answer depends partly on where you are: to foreign buyers, UK properties have just become ten per cent cheaper across the board, as the pound has plummeted against the dollar, the euro and other currencies.

Even for British buyers, property could represent a pocket of "depressed prices where there might be good longer-term value as a result", says John Redwood in the Financial Times.

After all, he adds, "tenant demand is still good and rents provide better income than you get on government bonds or on many shares".

One interested buyer who certainly isn't looking for buy-to-let is Adar Poonawalla, the heir to a £6.5bn family fortune who runs the vaccine business his father founded from Pune in India.

Poonawalla told Bloomberg he sees Brexit as an opportunity to snap up a "bargain" at the pinnacle of the property market. In 2014, he bid $562m for a second home in London, an offer that was, sadly for him, rejected.

The 35-year-old wanted to buy the historic Grosvenor House Hotel on Park Lane and turn "a couple of thousand square feet" into a pied-a-terre and keep the rest as a hotel.

Last year, Poonawalla paid £91m for a former maharajah's palace in Mumbai to use as a weekend home for the family. The magnificent building had previously been the US embassy.

Now he hopes to find a good deal in London within the next couple of years.

Poonawalla believes the low pound and fears from sellers that the market will crash will prove helpful. "That should present some opportunities," he said.

"I'm always looking for a good deal because sometimes you get a distressed sale, someone wants a quick easy deal, and we've got the liquidity to do that. It's definitely a place I would want a second home."

A graduate of the University of Westminster, Poonawalla is in favour of leaving the EU. "Brexit was the best thing for the country," he said. "Some business or trade might get hit for the first two years, but eventually, after three years, I think the UK will come out far stronger than in Europe."

The signs are that residential property prices in the UK are falling already. Research firm LonRes believes sellers are slashing asking prices in central London because of the Brexit vote.

In the 12 days after Britain voted to leave the EU, the number of sellers reducing their asking prices soared by 163 per cent, as seen against the 12 days before the vote, says LonRes.

The firm also found completions fell by 18 per cent from just before the ballot – and were down by 43 per cent on the same period one year earlier.

"If someone needs to sell now, they are going to have to take a bit of a discount," managing director Anthony Payne said.

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