How to Minimise the Impact of a No-Deal Brexit on Investors

Deal or No Deal… That is the Question
Although there has been ample discussion on a range of outcomes, including a departure under the terms of the current Withdrawal Agreement, it is likely that no-deal Brexit could happen.
Firstly, what is a no-deal Brexit? And what does this mean for investors?
A no-deal Brexit is the situation where the UK would leave the EU without a withdrawal agreement. This would mean that international trade agreements and reciprocal working terms within European Countries may no longer be in place.

What Does a No-Deal Brexit Mean for Investors?
Right now, the uncertainty of Brexit is affecting the housing market. And now that the Brexit deadline has been extended until the 31st October 2019, it is still not clear if there will be a deal or not.
But a no-deal Brexit doesn’t necessarily mean a housing market crash.
Although there has been speculation that a no-deal Brexit may trigger a recession and higher unemployment, the experts say that the high level of risk and uncertainty has already been priced in the stagnant housing marketing.
A no-deal Brexit would increase hesitancy amongst buyers and sellers, leading to a reduction in the supply of houses offered for sale. We have already seen a reduction in the number of available properties for sale.
However, people still move for many reasons… change of job, a growing family, marriage, divorce. These reasons are not impacted by whether there is a deal or no-deal Brexit.
The one thing all the experts agree on is that the UK housing market will start to grow again when both the buyer and seller confidence has returned.

What About Inflation?
Some companies may feel the pinch more than housing investors.
As the UK relies on a range of imported goods, a no-deal Brexit may risk causing an inflation in consumer prices. This could influence house building materials, whitegoods, sofas and cars.
Britain plans to eliminate import tariffs for many products for up to a year in the event of a no-deal Brexit. That would help reduce inflation for consumers but may expose British companies to tough competition.
An inflation would slow down the construction and renovation of houses and flats.
To Minimise a No-Deal Brexit for Investors
The Bank of England has warned that a no deal Brexit could shrink the U.K. economy by 8% in a year and result in domestic house prices falling by a third. We have already seen London prices fall by 0.7% in 2018.
The best way for investors to minimise the impact of a no-deal Brexit is to hold onto property until market confidence comes back.
The good news, people are always looking for homes to rent, especially in London, with house prices higher than other cities around the world.
And with interest rates being kept lower than anticipated, it is a good time to for investors to remortgage their loans to lock in low rates.
The advice from experts is to hold onto your assets, continue to rent and minimise construction works, until trade agreements are sorted.

To Buy, Sell or Hold?
With the uncertainty of how a no-deal Brexit will really impact the housing industry, it is difficult to decide whether now is the right time to buy, sell or hold.
If you are thinking about buying, selling or renting a property, then we recommend you seek professional advice, so that you can make a considered decision.
At REKA Property Management we give our clients the facts about the property industry and the opportunities to increase their rental returns while adding value to their investment.
If you want to know how to achieve solid rental returns and have peace of mind with your property, then call us on +44 (0) 203 286 6468 or email us at Admin@RekaProperty.co.uk
Doug

P.S. Please share your comments below. Are you currently deciding to buy an investment property? How long have you been looking? I would love to know your experiences and thoughts on this topic. I hope our paths cross again soon.