To an extent Real Estate law has largely remained unchanged by EU legislation over the years. Therefore, looking forward, the implications of Brexit are more likely to be commercial than legal. When reviewing real estate investment, the following may be worth considering:

• With a relatively low transaction volume in commercial real estate there will be issues for investors in obtaining accurate valuations of property portfolios with some institutional investors already moving to weekly valuation strategies in an attempt to put realistic valuations on funds as people look to buy and sell. Due diligence in respect of this will become paramount in assessing investment opportunities.
• As banks, financial institutions and large multinationals consider their position in the UK and the potential relocation to other EU financial centres to ensure business continuity (see ‘Passporting’ below) the increased supply of office and industrial space could have a detrimental effect on both rental yields and investments values.
• Needless to say, potential changes in other areas of law, such as the free movement of workers (Read our previous QuickStudy Impact of Brexit on UK Employment Law), goods and services, and environmental law, may also have an impact on investor confidence and will need to be considered carefully as Brexit negotiations progress.

It is yet to be seen whether the continued uncertainty will encourage or deter foreign investors. Whilst the above is focused on the potential negative impact of Brexit, the weakening British pound may in fact attract foreign investment whilst UK investors, who may well be further affected by any changes in UK lending rates, weather the storm.