Investing in UK Property Post-Brexit
On June 24th the British public made the historic decision to leave the European Union and since then, many property investors are asking ‘should I invest in post-Brexit Britain?’ Whilst uncertainty is still rife across the country – we ask, is there really any cause for concern?
Eliminate the emotion.
The advice ‘invest with your head and not your heart’ is nothing new and certainly has not come about as a result of Brexit. It does, however, seem more pertinent today than ever before.
While Brexit was initially met with disbelief by some, anger by many, and a determination for a second referendum by others; the reality is that leaving the EU means the UK will be free to establish stronger relationships with countries outside of Europe. In the week following the announcement, political leaders from Canada, the United States, Portugal and Germany all stated their intention to maintain a strong relationship with the UK.
With an increased ability to trade with countries around the world, combined with a continued relationship with the EU single market, the leave vote could provide a long-term boost for the UK economy.
It is also important to remember that the fundamentals which make the UK property market popular amongst investors have never been directly tied to the country’s EU membership. The high rental returns and long history of capital appreciation has not diminished as a result of the Brexit vote.
Brexit was inevitably going to be followed by an initial period of uncertainty. However, financial services agency, Standard and Poor’s, have forecast that this uncertainty will be short lived and the UK’s economy will begin to grow once again by 2018. With the recent political chaos now showing signs of subsiding with the appointment of Theresa May as the new British Prime Minister, we are already seeing signs of Britain’s recovery from the initial Brexit panic.
Overseas investors in particular stand to make substantial financial gains by thinking long-term. Investors dealing in US Dollars, Euros or UAE Dirham have a perfect opportunity to buy property in Britain while the pound is low and watch the value of their property increase as the market recovers.
Specialist property investments were a growing field in the UK long before the referendum result. Investment in hotels and care home facilities provides a tremendous alternative to traditional buy-to-let; with relatively low capital outlay, high yearly returns, exemption from stamp duty charges and extremely sustainable demand sources, which should remain largely unaffected by the Brexit vote.
The UK care home industry benefits from a source of demand firmly anchored in the demographic shift of the UK population. As the population ages, this provides increased demand for quality care services; something which will not change following the referendum result.
For the hotel sector, the decline of the pound could, in the short term at least, contribute to an increase in ‘staycations’ amongst Brits, as travelling abroad becomes more expensive; plus an increase in foreign visitors as travelling in the UK becomes cheaper. In the long-term, much like care homes, hotel investment should remain largely unaffected by the Brexit vote.
If you’re considering investing in UK property, whether a specialist property opportunity, or a traditional buy-to-let, contact a member of our team today on +44 (0)1202 765011 or email us at [email protected] for more information on our opportunities.