The region's residential and commercial property markets face a long period of uncertainty as the economic and political impact of the EU referendum results plays out, according to industry experts.
Occupier demand for offices, warehouses and shops could be weaker and investment sentiment subdued, according to Paul Baker, director in the regional office of internationall property agency JLL. 
The housing market could also be hit by political instability, Michael Robson, chief executive of Keynsham-based Andrews Property Group, said today. However, lower prices would be welcome by first-time buyers who are now priced out of the market.
Paul Baker said: “Even if it is effectively ‘business as usual’ for the UK in terms of trade and legislation until 2018, such a major change will inevitably create uncertainty in the economy and real estate markets. In the event of a well-managed exit these impacts will be largely confined to the UK.
“In the short term we may see a weakening in occupier demand. The impact on rents may be limited by tight supply, but activity will be adversely hit while initial uncertainty about direction and timing continues. Investor sentiment may also remain subdued in the short to medium term. For property markets, the initial correction may be most severe but should be followed by an upturn as opportunities re-emerge in UK core markets and benefits of weak sterling are recognised. Sentiment and relative pricing will be key.
“Much will depend on the speed of negotiation, the wider political picture and whether a clear direction of travel and timetable for an EU exit is established early on.”
JLL’s expert analysis:
· Occupier demand will weaken in line with economic growth and declining business sentiment. The impact on rents may be limited by tight supply, but activity will be adversely hit.
· Investor sentiment will deteriorate further subduing capital flows in the short to medium term.
· The residential market is expected to cool despite lower interest rates, but any correction will be mild.
· For property markets, the initial correction may be most severe and followed by an upturn as opportunities re-emerge in UK core markets and benefits of weak sterling are recognised. Sentiment and relative pricing will be key.
· Much will depend on the speed of negotiation, the wider political picture and whether a clear and favourable direction of travel is established early on.
Commenting on the impact on the housing market, Paul Baker said: “While the focus leading up to the Referendum has been on the UK's international trading relationships, we are deeply concerned that domestic politics will now be the key risk to the housing market. Regardless of the Referendum outcome, the UK has a deep housing supply imbalance and concerted attention from politicians to deliver credible, lasting solutions to the supply conundrum is desperately needed. Protracted infighting within the UK’s political parties will only harm the UK economy and any chance of a timely recovery from the expected economic slowdown.”
Regional senior director of property agents Bilfinger GVA, Jo Davis, added: “What is certain in the short term is that we will see a negative impact on trade volumes, foreign direct investment levels, exchange rates and borrowing costs. It is vital therefore that Government moves decisively to set out how the UK navigates through this new economic landscape, and so allows us to reach a more certain and stable outlook in the medium to long term.”
Michael Robson, of Andrews – which sells and lets residential property across the South and West of England – said: “The UK’s decision to leave the EU means that the uncertainty of the last few months, which has negatively impacted the market, will now continue and it’s hard to judge for how long this will be the case. This isn’t good news for homeowners.
“Previous market cycles suggest that timescales for recovery tend to be slow and long and we should be prepared for anything between three to five years for any significant bullishness to return.
“The great unknown here sits with government policy. Who will be in charge? What will happen to the stock markets and value of the pound? It’s very possible that some employers could panic and jobs could then be lost.
“However, let’s not lose sight of reality – of the things that we DO know. The underlying drivers of the property market (namely demand) will not disappear and so the market will recover as will prices. This presents a great opportunity for purchasers – especially those taking their first step on the property ladder – as they’ll have the opportunity to buy during the current lull and then reap the benefits as the market recovers.”
