The Good News for Property Investors with Brexit Decided
It happened, finally. The uncertainty around Brexit ended on 31 January 2020 with the withdrawal agreement. It will take 11 months for the UK to leave the EU during the transition period.
So, after years of turmoil, there are now positive signs for property investors. Here’s a summary of why now is a great time for property investors to purchase properties.
Five Post-Brexit Positive Factors to Encourage Property Investors
- Low Interest rates continue
The good news is that the UK interest rates held as the economy starts to show signs of picking up. The Bank of England has held interest rates at 0.75%, which benefits property investors, new home buyers and people who want to remortgage their home.
As reported in the BBC News, the Bank’s Monetary Policy Committee (MPC) voted to keep the interest rates unchanged. This is positive news. If the rates were cut again, it would signal a weak economy and slow growth.
Now with Brexit confirmed, more companies in the UK are going about their business as usual, and not worried about Brexit. In fact, survey data suggested that the UK growth will improve.
- Property stocks have increased in value
Another signal that the Brexit uncertainty is behind us are the property stock share prices.
For example, two FTSE 100 property stocks, British Land Co and Segro have shown recent growth in the company value, share process and dividend yields.
British Land Co, a real estate investment trust, has coped well with the previous uncertain property market environment. What’s more, the company is pursuing a multi-billion-pound development, which should provide increased value for shareholders.
Segro, a warehouse manager company, has increased in value by 17%, with shares increasing by 6%. The good news, Segro’s growth pipeline shows that the increasing trend is set to continue.
These two examples are giving confidence that the UK market is back on track.
- Building development is on the rise
Now that the Brexit uncertainty has finished, property development is on the rise in London. Currently there are 106 residential and 155 mixed-use multi-storey large-scale property developments currently under construction.
Sales for the properties have also increased since the announcement of the Brexit deal.
The good news is the large property developers have confidence investing back into the London property market and are expecting to see a continued growth.
- Seven-year property cycle is back in effect
During the Brexit uncertainty, there were claims that the housing market had slowed down. However, some experts said that the slowdown was not related to Brexit.
Instead, it was part of the normal market correction that happens when we experience high housing prices, otherwise known as the “seven-year property cycle.”
This property cycle refers to the changes in house prices through various phases in the property market, such as:
- the boom phase
- the bust phase
- the bottoming phase
- and the recovery phase
Although it’s not strictly a seven-year cycle, commentators use this number to describe the changes in the cycle.
Experts are closely watching the property market and have stated without the impact from the uncertainty of Brexit, the property cycle is back in effect.
- Uplift in property market
There is a definite uplift in the London property market. In fact, according to The Guardian and Halifax, UK house prices are rising at their fastest annual rate for nearly two years.
This uplift is having experts claim that the property market will be in reasonable shape for the crucial spring season.
This fast rate of growth of 4.1%, is partly due to the slow property market and delayed sales owing to the Brexit uncertainty.
Why Now is the Right Time to Buy
If you are considering buying an investment property but had held off waiting to see what the impacts of Brexit were going to be, then we recommend now is the time to act.
Why?
With Brexit in motion with the UK leaving the EU by 31 December 2020, the economy, shares and property market has started to react positively. Best of all, interest rates are stable.
The five post-Brexit factors are showing a resurgence of confidence in the property market, which means it is an ideal time to buy before property prices continue to rise.
Even with these positive signs of growth, we recommend that 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.
