A few days after the referendum and the reality is beginning to sink in. An article by Lief Simon of Live and Invest Overseas talks about the consequences of the vote.
With the exit predicted to take at least two years, when it is actually implemented, both sides can be expected to lose out financially. Brits have become used to low-cost airlines such as EasyJet and Ryanair. EasyJet is a British company, but it’s also the second largest airline in France, while Ryanair is Irish but operates out of the UK.
At the moment both these airlines are able to operate in the UK due to an open skies law that permits EU airlines to fly freely amongst countries in the EU. They will need to renegotiate with the appropriate regulating bodies to continue flying once the UK has become disentangled from the EU. This is likely to result in flight price increases, but an increased cost in flights is perhaps a minor concern compared to the other effects of the referendum. Many of these flights currently service Brits living overseas or those who have second homes and fly to tertiary airports that are often quite a way outside major cities and are less popular with holidaymakers. Even if the flights continue, if the Brits are no longer flying in, then it could affect these local economies.
Banks currently located in London will have to decide whether they wish to stay in the city. At the moment several banks are thought to be planning to relocate thousands of employees from London to other major financial centres in Europe including Frankfurt, Paris and Dublin. Currently Morgan Stanley is denying stories that it will move 2000 employees to Dublin, but these kinds of rumors are likely to persist.
The referendum has dampened down stock prices worldwide and the pound and the euro have both lost value. Lief Simon, like many others is predicting that it will result in lower real estate prices in the UK and in EU destinations popular with Brits and where many have bought second homes or retirement homes. However, the declining value of the euro against the US dollar does make European real estate more attractive. Markets likely to be popular include Portugal, particularly the Algarve, and if banks choose to move jobs from London to Paris, then this city could see an influx of wealthy buyers who might previously have chosen to purchase property in London.