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What does Brexit mean for UK property?

The question that continues to be asked, and rightly so – “Is the UK investable today given the Brexit risk that overhangs it?” Granted, we do not have a crystal ball and it is difficult to state our estimations in terms of the UK’s exit from the European Union, and the subsequent economic impact. However, with the UK’s deadline to leave the EU just over two months away, all eyes are on the real estate market and how it will behave when – or if – Brexit becomes a reality this year.

The key feature of Brexit, its uncertainty, is leading to “fundamentals being overlooked and [the] perceived risk overstated at times.”

Which is why it is important to note that the main reasons why people buy and invest in the UK will not change due to the country’s vote to leave the European Union.

Demand for housing still outstrips supply, pointing to UK property remaining a sound long-term investment that has, historically, appreciated in value.

The greatest impacts on the housing market are a result of domestic policy, rather than Brexit. Though in late 2018 between September and October, the property market saw an upturn in transaction activity of 0.9%.

The UK is one of Europe’s strongest property markets, and Office for National Statics figures show that investment from overseas is continuing to rise at a steady pace. With a weak GBP, savvy overseas investors are taking advantage of the currency situation, twinned with a mid-long-term hold view of any UK property acquired (for income and growth).

Since the referendum in 2016, house prices have risen by 9.3%. Ironically, Emoov research shows that average growth in Leave voting areas, was slightly higher than the national average, at 9.46% in contrast to 5.05% in Remain areas. Showing a more positive and clear business as usual attitude in Leave regions.

We believe there is a unique opportunity to buy well located, good-quality assets that need attention – perhaps they have a gap in income or require some capital expenditure. Especially in the major cities across the UK outside of London, which typically offer much greater growth returns.

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