Should UK property investors be looking to overseas markets?

Discussion in 'General Property Investment Discussion' started by Longterminvestor, Oct 28, 2017.

  1. Longterminvestor

    Longterminvestor Active Member

    Are the prospects in some overseas property markets greater than the UK market even when taking into account the drop in sterling?
     
  2. diyhelp

    diyhelp Active Member

    This is a tricky one - UK investors convert into a foreign currency to buy a property overseas, Brexit talks start to improve and the pound recovers. They could find themselves up to 20% on the wrong side in sterling terms - personally I would be more inclined to sell overseas assets and convert the funds back into sterling taking advantage of the recent exchange rate movement. Sit on cash and then wait for the next opportunity.
     
  3. Until I see some kind of recovery in Sterling I think my focus will be on opportunities in the UK market. Even though the fall in value against the Euro since the Brexit vote is a lot less than the fall against the Dollar, there is still a lot of uncertainty out there. Last week we heard rumours of a "no deal" and sterling faltered!
     
  4. somtam

    somtam New Member

    Dont ever believe theyll be a no deal. its all political posturing. Can you see Angela Merkel telling BMW that they cant sell into the uk....it just aint going to happen.
     
  5. Longterminvestor

    Longterminvestor Active Member

    Somtam, I totally agree there will be a deal because the EU has more to lose. However, the Labour Party forcing the UK government to reveal secret reports into the possible impact of Brexit is crazy - strengthens the EUs hand. Almost as if many politicians dont want Brexit to happen :)
     
  6. kchiggs

    kchiggs Member

    Actually merkal has already told them to prepare for the hardest brexit i.e. no.deal. they are not going to stop exporting they export to other non eu countrys
    Tarrifs.and job losses yes. Look at what happened when European weather interrupted the food supply to england.
     
  7. kchiggs

    kchiggs Member

    Can't see the more the eu has to lose. Can see the gov collapinsg over this and who knows who we.will get next.
     
  8. nmb

    nmb Well-Known Member

    Looks like Theresa May has a stay of execution after todays deal? However, I also agree that we will see a change of government sooner rather than later and probably a swing to the left. The EU would love this as Corbyn and his crowd would either wreck Brexit or sell the UK down the river.
     
  9. kchiggs

    kchiggs Member

    Not sure as the dup were already complaining about ni "no regulatory loss" so unless she can get a deal in that pleases dup and enough brexit hardliner Tories to stop a revolt. Short of another confidence and supply partner or another election to get rid of dup don't see how it can be pulled off.

    I think Corbyn is off the reverse brexit mob which is probably a UK wrecking idea now unless you can get a Swiss style deal or maybe Norway style with the common travel area kept. What worries me is that the divorce bill is in euros and no one has argued this for the UK. Paying bills in foreign currency is what wrecked the Weimar republic. If sterling drops enough due to the market perceiving a bad brexit (and the eu follows through on more integration now UK veto is gone strengthing the euro) the uk will have to qe to pay brexit bills which will devalue the pound which will mean more we which wouldn't happen in a pound deal.
     
  10. lookinginvest

    lookinginvest Member

    Great point - the first rule of business is limit your downside. In this instance, get a figure in terms of sterling as opposed to euros. A reversal of Brexit at this late stage would make the UK a laughing stock and wreck any confidence investors have in this country.

    Any deal which ties the UK into the EU in some kind of way would be counter-productive as part of the deal would be an inability to negotiate individual trade deals for the UK. We would end up with no say and still tied into the EU - and probably end up paying for it as well.
     
  11. kchiggs

    kchiggs Member

    Worse it is not like they gave this up to gain another concession (I'd argue it would be worth a hard brexit to keep it unless we could get a fixed exchange rate for the bill but if the negotiators disagreed fair enough) not did they lose it in a tough battle but it seems like they didn't even bother about it. Which suggests they are just not competent or callous becuase they are not worried about limiting downside.
     
  12. nmb

    nmb Well-Known Member

    Or they expect Brexit to fall apart and the EU/UK will come to an arrangement on immigration so the UK remains in the EU? A very long shot but dont rule this out :) Sometimes I get the impression that negotiators on both sides are just going through the motions?
     
  13. diyhelp

    diyhelp Active Member

    The UK is stuck between the devil and the deep blue sea - if the government was to decide a return to the EU fold was best surely the damage has been done and other EU members would have the knives out? Leave the option of a no deal on the table and the uncertainty could wreck the UK. I think the UK HAS to do a deal with the EU, even if it favours the EU in some way. However, this will infuriate hard line Brexiteers. Mmmmm - not a good situation to be in.
     
  14. nmb

    nmb Well-Known Member

    I see there is now confusion as to whether Jeremy Corbyn is supporting a second referrendum or not - just what the financial markets need, another politician happy to flip flop Brexit policy :(
     
  15. Longterminvestor

    Longterminvestor Active Member

    Is the EU making an example of the UK - or trying to - as a way to stop others from following the same path?
     
  16. kchiggs

    kchiggs Member

    I'd say the eu is succesfully making an example of the UK. Remember the deal doesn't have to be bad for the UK but if it is too good, then they have to worry that Germany might want the same deal. (Although some economists suggest splitting them off from the euro might not be a bad idea) the deal has to be bad enough to stop others so a good question for the UK negotiators is what do the rest of the eu member states like or think is important that we dont. Barring our access to that is a negotiating tatic.
     
  17. lookinginvest

    lookinginvest Member

    While on one hand the EU does seem to be making an example of the UK, on the other the UK is still an extremely large economy which does carry some weight. Personally, I believe that other EU member states will follow the UK in due course unless the EU can get them tied into watertight agreements whereby they depend on EU finance. Let’s not forget, the UK was a massive net contributor to the EU budget and while the politicians talk of making up this blackhole, it will not be as easy as they suggest!
     
  18. kchiggs

    kchiggs Member

    Partly agree. The EU has to make an example to an extent, after all if the UK got all the benefits of membership wirh none of the drawbacks everyone else would want the deal so what would bw the point of the EU. The size of the UK economy is of course smaller than the eu-27 economy although the UK does punch above its weight that's only effective of your negotiators offer something of value.

    The new economy for the eu will be a testing time but unless the UK is offering up money not likely to carry a lot in the negotiations
     
  19. nmb

    nmb Well-Known Member

    Some people are suggesting the UK should pay an annual charge to stay within the single market rather than negotiate a trade deal. In my mind this is crazy because:-
    • The UK would not be able to negotiate deals with other countries around the world.
    • The UK would be paying for membership of the single market, would have no say in the EU policy process but would need to abide by them.
    It has to be a trade deal with the EU or revert to WTO which is the worst case solution for everyone.
     
  20. kchiggs

    kchiggs Member

    If one takes the Norway model the first point is untrue.
    It has the advantage of being a transitional period that allows a worked out poinr for the UK to quickly negotiate a few key points, start tying up trade deals with other countries before brexit. It seems like a very good compromise and way to get out quicker. Start soft and harden the brexit as the UK gets stronger.

    If you replace VAT with tariffs on eu exports to meet your bill (and adjust Corp tax for revenue neutral) esp if deoniminated and paid in £ you can push the cost onto the beneficiaries.

    You'd need to effectively abolish VAT to free up the staff HMRC needs for running the tarrif. UK can argue for sunset provisions or expiring opt-outs perhaps with an option for the UK to leave or unilatry agree to certain items of value.

    Giving up VAT and votes on a block that your leaving anyway and a few headaches foe accountants would likely be considered a very small price to pay.

    The only sticking points would be who the arbitrator would be here and the NI border.
     
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