UK investors pull out of retail property purchases

UK investors are backing out of purchases on retail properties in the UK following Brexit, new figures have revealed.

Analysis by rplan.co.uk, an online investment platform, has found that investors are pulling out on shares in commercial properties, such as shops, office blocks, retail parks and warehouses, and are switching to stocks globally and in Japan.

The platform experienced a 175 per cent increase in the number of trades over the weekend following the Brexit result, compared with the previous weekend. Of this, 76 per cent were withdrawals from property funds and 22 per cent from UK equity funds.

The top purchased sectors were Global equities (56 per cent), Japan equities (20 per cent), UK equities (16 per cent) and North America equities (5 per cent).

Stuart Dyer, rplan.co.uk’s chief investment officer, said: “UK investors’ fears about the prospects for property are striking. Clearly, there are worries that property would be affected by a possible economic downturn and the withdrawal of foreign investors.

“But investors should not be too hasty in making decisions about the consequences of Brexit. Property and other asset classes have their roles to play in a balanced portfolio invested for the long term. Diversification helps to reduce both the impact of volatility and risk.”

Following the Brexit result and the Prime Minister’s resignation, the British Retail Consortium (BRC) and Federation of Small Businesses (FSB) called on the Government for stability in the small business sector.

In a statement the BRC argued that, “without clarity, retailers, other businesses and the economy will suffer from a prolonged period of uncertainty”.

It added: “We are already seeing the commencement of a period of considerable volatility, as financial markets react to any emerging information that might indicate how the new relationship to the EU might be shaped. Retailers should be prepared for the possibility of significant swings, particularly in the exchange rate and consumer confidence.”