The UK votes to leave the EU

The UK has voted to leave the European Union – on a very high 72.2 per cent turnout, there were 51.9 per cent in favour of leaving and 48.1 per cent in favour of remaining. In the wake of this, David Cameron has resigned as Prime Minister. While this might lead to feelings of uncertainty in the short term, the UK has more than enough resources to weather the changes in the long term.

Although the landscape may be highly volatile in the short term, there are efforts underway already to minimise the financial upheaval over the next few days and weeks.

A statement from the Bank of England says it is “monitoring developments closely” and will “take all necessary steps to meet its responsibilities for monetary and financial stability”.

It adds that it has “undertaken extensive contingency planning” and is “working closely with HM Treasury, other domestic authorities and overseas central banks”.

It is thought that these stabilisation measures will minimise any impact on capital values of houses, although key indicators such as the level of Sterling against other currencies may be volatile. The falls seen in the value of the Pound in the hours immediately after the referendum result have made London and other British property effectively cheaper – by as much as 10 per cent – to overseas investors who wish to buy in the immediate term.

The process of the UK leaving the EU may take well over two years and may not even begin for some months.The exit process is triggered by the UK government invoking Article 50 of the Treaty of Lisbon (a central part of the EU). It is thought likely that this ‘trigger’ will not be used for some weeks or months, by which time a government reshuffle may have taken place to create a ‘negotiating team’.

Once Article 50 is triggered there is a two-year clock running. After that, the treaties that govern membership no longer apply to the UK; in the intervening time, the UK will negotiate with the 27 remaining EU countries.

During the next two years at least the UK will still have to abide by the free movement of EU citizens, almost certainly with an accelerated inward flow of those who wish to move to this country before the withdrawal process is complete. This is likely to lead to continued high demand for rental accommodation in particular in London.