Theresa May’s speech last Tuesday took us closer to understanding what a post-Brexit Britain may look like but offered little by way of concrete facts and figures. Now, with the Single Market inextricably tied to free cross-border movement, it seems Britain’s trading position is due for a bigger upheaval than some would have hoped, and in Scotland, another independence vote is once more being debated.
What does all this mean for property? Well, in truth, things aren’t that much clearer than they were when the referendum result was first announced. We know the general direction of Brexit but little of the detail, and it’s hard to respond when so much is still to be negotiated.
There are some financial sector businesses threatening relocation to mainland Europe. Ireland is hovering in the wings, waiting to offer a home to businesses thinking of sticking with the freedoms – and restrictions – of the single market. But the UK Government are unlikely to lie down without doing what they can to attract overseas business to the UK.
If there are corporation tax breaks offered – perhaps the most likely tactic in the Government’s armoury – then any incorporated property rental business should feel the benefit. But, we mustn’t forget that recent policies have sought to control the sector and hitting small-scale landlords, with mortgage debt, in their pockets. Would the Government allow the property rental sector to shift ‘en-masse’ to limited company status? Or would they still attempt to regulate housing provision via the tax system? It’s just too early to tell.
Of course, there are other implications than tax for the sector. If businesses relocate, do they take or bring their workforce with them? Does this provide more opportunities for a renting to a possibly more transient workforce? Most people moving to a new position are more likely to rent than to buy. A younger workforce, similarly is more likely to rent. And naturally, if there are significant shifts in employment, then rental values will adjust based upon levels of demand. Perhaps the capital will be most affected by changes to the financial services sector.
What won’t change anytime soon is the shortage of properties in Britain. Even post-Brexit, people want to live and work here. We may face a period of re-adjustment, but that’s normal in any housing market, and as business owners and investors, we need to be able to cope with change.
Until the route of our exit from Europe is fully mapped, we need to keep on getting the basics right and maintain a strong and professional industry voice. That way, when things do start to become clear, we’ll be ready to respond.
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