Aside from the fact it was bizarre to see last week’s Brexit GDP forecasts after “the deal” has been signed, there is no mention of the actual “deal” signed by Theresa May. So, it is fair to say that there is still uncertainty in the UK property market. However, many investors have been scratching their heads, if the crash is coming then why aren’t property prices softening to a greater extent?
Listen to the markets
First of all, if the UK was to leave the European Union with no Brexit deal then we might see sterling tank. The likelihood of that happening – well, the “political elite” seem to have their own agenda to stop Brexit in its tracks and even derail it for good. So, while sterling has been a little volatile just lately it is not yet showing any signs of the fall many expect. The same can be said of the UK property market. Yes, we have seen softening in London and prices in the south-east, but even these cannot be deemed to have “crashed” when taking into account recent performance.
Fear is the main factor
Irrational fear of Brexit and its many connotations is the greatest threat to the UK property market in the short term. So far, sellers have refused point-blank to sell their properties at a knockdown price suggesting there is no panic selling just now. Investors, as always, are looking to negotiate lower prices for those tempted to sell up. However, property market statistics suggest investors are sitting on the sidelines for now.
There seems to be a growing consensus amongst the “political elite” that it is their duty not to allow the UK to crash out of the European Union with no trading deal. Rightly or wrongly, politicians are now beginning to ignore the will of the people although that is another subject for another day. In order to strengthen their position we have seen the re-emergence of “project fear” and little or no focus on more positive reports (yes, there have been some positive Brexit reports).
Cherry picking your next investment
It does seem highly likely that some property owners will look to jettison their assets as the concern and confusion is ramped up to a critical level. As a consequence, savvy investors currently keeping their powder dry will likely be able to cherry pick some very attractive assets with a long-term investment strategy. Yes, there will be some volatility in the UK investment markets in the short to medium term but the sky will not fall in, the UK economy still has a strong core and, let us not forget, the UK is still one of the largest economies in the world. So, as we are likely fast approaching the point of most concern so we are likely to see more investors selectively picking up quality assets.
Savvy investors are keeping their powder dry with regards to investment in the UK property market. The short to medium path of Brexit is no clearer today than it was two weeks ago. There is talk of installing a Labour government with the support of the SNP if Theresa May was to lose her Brexit vote and a vote of confidence. We are in a very difficult, complicated and volatile scenario. It looks as though politicians will go against the wishes of the people and we may see a minority Labour government (held up by the SNP) without a general election. Many people will be asking themselves, how is this democracy?
Amidst all of this concern, anger and confusion, you might just pick up some rather attractive property investments.