Well in 1939 Winston Churchill said: “I cannot forecast to you the action of Russia. It is a riddle wrapped in a mystery inside an enigma; but perhaps there is a key. That key is Russian national interest.”

Churchill was proven right. Self-interest is invariably the key. Occasionally you will come across people who will cut off their nose to spite their face – this is especially true in negotiations when egos get in the way – but on the whole self-interest wins out.

My view is that the whole referendum question has been handled exceedingly poorly. In fact, it is symptomatic of the lack of strategy that has pervaded government policy for several years (both Conservative, Lib Dem & Labour). We seem to be governed by people who change direction with the wind rather than standing firm and sticking to their convictions.
But this is not the time for a political rant! I expect self-interest will trump any desire to vote “out”.

Firstly, the majority of voters really don’t care that much, but the most vociferous are invariably those agitating to leave. As several people have pointed out, those who are happy with the status quo (which seems to be the majority) will quietly go about their day to day business without shouting that we need to stay in. And then on the day of the vote they will turn out in higher numbers than expected.

Secondly, during times of economic nervousness humans tend to default to what they know rather than take risks. At the moment the UK economy seems to be recovering tentatively but that could be upset in the short term by the uncertainty caused by a “Brexit”. People who are still nervous about job security will not vote in favour of leaving = self-interest.
We will soon see if this prognosis is correct or whether I will be frantically scrabbling for my German Degree and French ‘A’ level books in a desperate bid to regain some fluency.
But this is assuming that a Brexit would be calamitous for the UK and London property.

Now I should point out that I don’t think that there is a wrong or right way to vote – whatever the outcome some will benefit while others will lose. In fact, I am stunned by the stupidity of the whole affair. Why does it have to be a yes or no vote? There could be so many different and intelligently negotiated outcomes that could work for most if not all parties involved. But this is the problem with governments that seem to have no strategy.

Anyway, the key question for the purposes of this note is:

“What will the effects of a “Brexit” be on prime London property?

And the truthful answer is that no-one has a clue.

For what it’s worth, I expect it will have very little effect in the long term but might have short-term repercussions as markets simply don’t like uncertainty. However, I do find predictions of a total market collapse rather hard to envisage despite what the doom-mongers suggest.

The one question no-one has been able to answer me satisfactorily is why is it that the UK would collapse and not the Eurozone? After all, it wasn’t that long ago that Greece or Portugal leaving the EU was seen as utterly calamitous. Surely if the UK was to leave the effects would be even worse (not to mention the fact that it would open the doorway for other countries to follow suit). In such an instance London property would be seen as even more of a safe haven than it is now.
But an even more pertinent question is why would any country suffer unduly in the medium term? Are our politicians and business leaders so stupid that they would go out of their way to reduce the wealth, security and happiness of their people over a few documents?

Yes, I am aware that I am simplifying this and I am also aware that history is littered with acts of gross stupidity and incompetence by our gallant leaders, but I find it hard to believe that in an era of relative abundance and security that anyone would jeopardise this.

Are the Germans going to stop selling cars to the UK? Are UK advertising companies going to refuse to work for LVMH? Is Santander going to shut down its UK operations?
Complacency may be my downfall, but in this instance I think that both the yes and no camps are generating scare stories and worst case scenarios that are designed to sway voters rather than being grounded in fact or realistic outcomes.

At the moment, Cameron’s side appears to have the bigger guns (e.g. Obama, eminent politicians from outside the Eurozone, central bankers, well-known business leaders) and so a vote to stay in the EU is looking the most likely outcome. But whatever the vote, do you really see London becoming a barren wasteland?

This is why I think now will prove to be a very good time to acquire a property in London. If you haven’t read my latest report 1998 and 2016 – Opportunity Disguised As Disaster, it is essential reading if you want to understand what is happening in the market right now.

See also:

The Great Brexit Lie