It would be quite the understatement to say that since the news filtered through on 24th June 2016 that the British electorate had voted in favour of leaving the European Union (EU) by 52 per cent to 48 per cent, the country’s population has been divided as to what it all means.
It’s a similar situation as far as the UK property market is concerned, with Remain and Leave-backing voters, campaigners and observers often adopting very different perspectives on the prospects for the sector – and investors – in the months and years to come.
Could Brexit be a threat to inward investment?
Much of the original campaign urging voters to back remaining in the EU focused on the importance of protecting the economy, and to this day, ‘Remainers’ still fret about the implications that Brexit could have for businesses in the UK property and construction industries.
Many such campaigners have suggested that the market uncertainty brought about by Brexit could, in itself, cause potential investors in UK property to look instead to countries with more stable political environments.
Architecture and construction are sectors that could receive less inward investment due to Brexit, Remainers claim, not helped by the probable end of EU-based funding for UK regeneration projects. Indeed, a recent article in The Guardian is among many since the Brexit vote to have indicated that the construction sector is being adversely affected by the ongoing uncertainty.
Others, though, see an opportunity in Brexit
Predictably, ‘Leavers’ have rubbished Remainer suggestions of doom and gloom for the UK property market, before or after Brexit. They point out that there will always be opportunities for investors in UK property who keep their eyes open for the right deals, which might even become easier to find amid an understandable Brexit-influenced shift in the market.
Many such advocates of the UK leaving the EU cite the historic stability of the UK property market, including its impressive revival from previous slumps. While, for instance, UK house prices fell by about 20 per cent in the months immediately following the 2008 economic crash, over the following six years, they returned to pre-crisis levels and have sustained their steady climb – at least outside London – ever since.
It’s also worth noting that even amid the ongoing conflicts between Remainers and Leavers about the likely impacts of Brexit on UK property investment, these groups do agree that certain trends will probably be largely unaffected – for example, the continued predominance of ‘Generation Rent’ and the increasing attractiveness of the north of England.
So, will Brexit be the saviour or scourge of investors in British property?
The squabbles between Remain and Leave-supporting camps will doubtless continue right up to and beyond the country’s EU departure. Nonetheless, it is almost guaranteed that whatever conditions the country faces in the months and years ahead, there will always be openings in the UK for eagle-eyed property investors.
Would you like to receive guidance as to which next steps you should take in your own UK property investment journey? If so, we would be delighted to advise you when you contact the HE Global Investments team.