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Brexit: One Week On

Our summary of key events since last Friday.

No one could predict the ramifications that the campaign to determine the UK’s future involvement with Europe could have brought, since it began on the 20th February 2016.

It would be unprofessional to provide clear predictions as to how we see the situation developing, but thought it prudent to provide a general summary of facts and our company performance since last Friday:

1. We have not lost an agreed sale as a result of the referendum outcome.
2. We have experienced a 17.8% increase in registrations from overseas purchasers since last Friday.
3. We have concluded a similar level of rental performance, compared to the similar period in 2015.
4. 359 new lettings instructions have come available within our territory since last Friday. 125 properties have had their price reduced.
5. 108 new sales instructions have come available within our territory since last Friday. 36 properties have had their price reduced.

We are finding that both our Clients and prospective Tenants and Purchasers are considering their position based on the FTSE and how the Pound is trading against the salient currencies.
Please find a snapshot of these important points, depicting performance over the past week:


The FTSE 100 rose from 6138.69 at close of business on Friday 24th June 2016 to 6504.33 at close of business on Thursday 30th June 2016.

We take this chance to provide some other comments that may support the performance of the Prime Central London property market.

It was an assured address by Mark Carney, the Governor of the Bank of England, which appeared to settle nerves and convince markets that we weren’t facing Armageddon.

Final results showed 17.4 million voted to leave, against 16.1 million votes to remain. Unfortunately this is an unconvincing 52/48% split which in itself poses serious social and political questions about the UK's future. However, it does put pressure on politicians to make an effective and workable deal with the European trade market.

The pound fell to its lowest level in 30 years against the dollar after the electorate defied what was clearly a misguided market which, only 24 hours earlier had been rising on the observation that bookmakers were seeing a 90% chance Remain would win the vote. We are aware of numerous Clients transferring currency to the UK to utilise this opportunity to their advantage.


The Political Process

The unexpected referendum result has led to dissent throughout the two main parties, with the Prime Minister resigning the same day and a growing demand within the Labour party for Jeremy Corbyn to stand down as their leader. 

New Prime Minister

With regard to the process of selecting our next Prime Minister, nominations have now closed and we understand the following parties to have declared themselves as candidates:

• Theresa May – Home Secretary
• Michael Gove – Justice Secretary
• Andrea Leadsom – Energy Minister
• Stephen Crabb - MP for Preseli Pembrokeshire
• Liam Fox – former defence Secretary, MP for North Somerset

A ballot paper is produced and issued to all Conservative Members in the House of Commons, who indicate one choice from the candidates listed. The ballot is conducted in secret. As there are more than three candidates in the first ballot, to be held on the 5th July 2016, the candidate receiving the fewest votes will be eliminated before a second ballot the following Thursday. This process is repeated as often as necessary on alternate Tuesdays and Thursdays, until only three candidates remain. After this final ballot, the two candidates who receive the highest number of votes go forward to the general membership. Candidates may withdraw their names at any time, "up to 24 hours of the opening of the ballot", but no new nominations will be accepted after the first ballot.

The two candidates selected by the Parliamentary Party are then put to the full membership of the Party in a postal ballot. Each Party member, on a "one member one vote" basis, votes for their preferred candidate. The Chairman of the 1922 Committee consults with the Board of the Conservative Party to agree the closing date for the ballot, which will be "as soon as practicable" after the date of the last ballot in the Parliamentary Party. The Chairman announces the results "as soon as practicable" to a meeting of the Parliamentary Party and representatives of the Conservative Party.
It is expected that the New Leader will be announced on the 9th September 2016.


Labour Leadership

On Tuesday 28th June 2016 a motion of no confidence in the Labour leader Jeremy Corbyn is passed by the party's MPs. The 172-40 vote, which is not binding, follows resignations from the shadow cabinet and calls on Mr Corbyn to quit.

However, Mr Corbyn said the ballot had "no constitutional legitimacy" and that he would not "betray" the members who voted for him by resigning.

Anyone wishing to challenge Mr Corbyn needs the backing of 20% of Labour MPs and MEPs. Currently there are 231 Labour MPs and 20 Labour MEPs so any potential candidate needs the formal support of 51 of them. If a nominee secures this level of support, they must then write to Labour's General Secretary announcing their intention to run.

No-one as yet has come forward, although potential names being mentioned include former shadow business secretary Angela Eagle, former shadow home secretary Yvette Cooper and backbencher Dan Jarvis.


European Parliament

The European Parliament president, Martin Schulz, stated on Tuesday at the EU summit in Brussels, that the choice made by the British people in the EU referendum needs to be implemented "as soon as possible” with Parliament’s full involvement. “A spell of prolonged uncertainty would be in no-one’s interest," he said, adding that the EU itself should also reform.

Schulz said he regretted the choice made by UK citizens but that their will needed to be fully respected and implemented as soon as possible. He also added that Parliament would have to give its consent to the outcome of the negotiations with the UK and thus must be fully involved at all stages.

Schulz highlighted the need for the EU to change: “The European Parliament is convinced that things cannot go on as they have in recent years… We need to relaunch the European idea, to show a capacity for self-criticism, an awareness of where we should reform the EU to deliver more effectively and make it closer to citizens."

The Dutch minister, representing the EU’s rotating presidency, declared "It will be in the interest of us all to ensure that a future relationship will be constructive and mutually beneficial.  No-one will benefit from a prolonged period of political limbo". "At the same time, we should allow the UK the time it needs to recuperate and take the necessary decisions. Now, a part of Europe's challenge is to convince citizens that unity remains the best choice. The fact that fragmentation is no longer unthinkable, should gravely concern us all".

European Commission President, Jean-Claude Juncker said “We must respect the will of the British people”, and “there must be consequences”. He asked the British government to “clarify” the situation as soon as possible, so as to prevent uncertainty. “No notification, no negotiations”, he added, insisting that there would be no secret or informal talks with London. To UKIP leader Nigel Farage, he said, “you are fighting for the exit, the British people voted for the exit, so why are you here?"

“We won’t leave you on your own”, EPP group leader Manfred Weber (DE) promised Britain’s youth, more than 73% of whom voted “remain.” Populists had won the referendum, he said, adding “shame on you” to Nigel Farage, whom he called a “liar” in a reference to allegedly false campaign claims.


We are firmly within a period of great change, with decisions being made that will irrevocably shape the political and economic landscape of Britain. The next step is for the Conservative Party to choose the person who will negotiate our departure from the EU. A momentous task for anyone to take on; however, an exciting opportunity…

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