The harsh reality of business is that any media company will have a particular bias towards a certain type of political party. This is how many media companies build up an audience and this has been ongoing for many years now. We only need to look at the UK property market to see how the political bias of various media companies cast either a very dark light or very bright light on Brexit. So, does political bias really impact the UK property market?
Investor confidence is everything
Whether or not you are in favour of Jeremy Corbyn’s policies, and his shadow chancellor’s seemingly limited grasp of economics, is neither here nor there. The fact that Jeremy Corbyn has been mentioned across both the left-wing and the right-wing media as a potential saviour of the people and the enemy of property owners is interesting. There has been talk of a multibillion pound investment in social housing, an increase in taxes for the wealthy and a loosening of stringent planning laws to make different types of land available for redevelopment.
The media is a very powerful animal and while not necessarily being “untruthful” they tend to be biased in one direction and sometimes ignore facts and figures which do not suit their argument. The reality today is that this type of biased media reporting is having an impact upon UK property investors who are quite rightly a little confused.
Despite the fact that the UK population voted to leave the European Union many left-wing politicians have been trying to overturn the referendum result. There has been talk of a collapse of the UK property market if we leave the European Union, less demand for the rental market and suggestions that the UK property market could become a pariah for overseas investors. The reality is that nobody knows how Brexit will pan out, how long it will take and many choose to ignore the fact that the UK spends more on European goods and services than the whole of Europe spends on UK goods and services. Who needs a trade deal the most?
It is also worth noting that a bid to retake control of UK immigration will not mean that the UK population does not grow in the future. Quite simply, European applications to move to the UK will be treated exactly the same as those from other parts of the world. They will be considered on merit and, like Australia, we may well see more focus on those with particular skill sets which are in short supply in the UK. This will lead to demand for property, both outright purchases and rental, so long-term concerns about the UK property market do seem a little wide of the mark.
In the midst of a battle between left and right wing media outlets currency considerations are often ignored. The fact that the UK currency has fallen by around 20% against the dollar since the Brexit result makes UK property even more attractive to overseas investors. We have seen overseas investment increase in the UK despite suggestions that the UK economy will collapse after Brexit. The UK has one of the largest economies in the world and while the combined European market is extremely large, as we touched on above, UK consumers and businesses spend more on European goods than Europeans do on UK goods.
It will be interesting to see how the Brexit negotiations pan out, whether the UK is able to hold its ground on important issues such as finance and whether access to the single market will be part of the final settlement. History shows us, and nobody is discounting the fact Brexit is a major change for the UK, that UK property markets consider, reflect and adapt to any changes thrown at them. The fact that property prices have held relatively steady, although there are some signs of a slight softening, says more than you will ever read in the left-wing or the right-wing media. Watch the markets to get the real story…………..