It would be a lie to say that the uncertainty that has arisen from this year’s Brexit vote in the UK hasn’t touched almost everyone in the country – and those who have an interest in the country. Whether you are a low skilled worker in the UK, British family who has moved to another European country for a lifestyle change, a parent of young children, or work for an international company, it is likely that the country’s leaving the EU will have some sort of impact on your life.
Part of the uncertainty which is occurring stems from the fact that, whilst having the vote to remain or leave the EU, British voters were never given more details about how a post-Brexit Britain will look – and indeed when it will happen.
Theresa May’s recent announcement that Article 50 is to be triggered by March 2017 is the first sign of the dust beginning to settle after such a huge decision, allowing us to finally begin to see where the country is heading.
What We Do Know
Whilst it is still very much in the air, what Britain will look like once Article 50 is triggered, and of course afterwards once all of the negotiations have been resolved, there are some things which we can be sure of.
The main difference is that we will be in control of our own destiny, so to speak. For example, we will be negotiating our own tariffs and trade deals as Britain and (hopefully) discarding the parts of the EU tariffs and deals which aren’t beneficial to the country. This could mean better trading within Britain – between ourselves, and the possibility of better deals trading with other countries worldwide – not just in Europe.
Of course the specifics of the new deals and tariffs are still unknown (depending on the negotiations carried out), but we can be sure that the British negotiators will be working on behalf of the people and businesses of Britain – and not of the whole of Europe.
The Property Market
One of the potential benefits to property investors in Britain is that we might see a reduction in the number of foreign investors wanting to buy property in the UK. This means a lower demand and therefore could turn into lower prices. Properties to rent (especially in London), however, are still likely to be in huge demand – another bonus for investors. Statistics today nevertheless point towards demand of property still tremendously exceeding supply. In Fact, according to the parliament’s research publications the need for additional housing in England is estimated to be between 232,000 to 300,000 new units PER YEAR, a level not reached since the late 1970s and two to three times current supply!
One thing that lessened the impact of the European financial crisis on Britain was its independence from the euro. Whilst we are expecting a bumpy road during the Brexit negotiations, and maybe for the first couple of years afterwards, the financial stability of the country is likely to become stronger. We should have even more control over our economy and spending, meaning a potentially stronger pound and healthier financial outlook.
A healthy financial outlook is of course great for the property and investment market, creating good movement within the market. With plenty of buying, selling and profit to be made by everyone.
Of course, the new deals and tariffs which are to be negotiated will have an impact on overseas property investment, although that doesn’t mean that it will be worse. A strong pound against a weaker euro would mean that even if negotiators don’t manage a situation which is tariff free, property investors can still get great deals and make good profits.
In a country with an ever increasing population, even with the government’s house building programmes, and the possible reduction of immigrant numbers, it’s unlikely that the demand for rental property will fall. Quite the opposite actually, renting has never before been so popular. At least 1.8 million more households will be looking to rent rather than buy a home by 2025 according to the Royal Institution of Chartered Surveyors (Rics). And this is why the future is bright for property investors. A stronger pound, trade deals and tariffs which are tailor made for British businesses and investors mean that the outlook is looking good – even with the understandable uncertainty which has come with Brexit.
The triggering of Article 50 is the beginning of an end to the uncertainty and a future of more control – something which the sooner it can get started, the better.
If you’re ready to start your buy-to-let journey, get in touch today.
If you’d like more information on how Brexit is currently affecting the UK’s buy-to-let market, you might be interested in this article.