Brexit… What’s going on?
OK, I long ago vowed to stay well out of this sticky subject because my crystal ball just doesn’t allow me to predict what’s going to happen. However, today I thought I would weigh in slightly (I’m still not going the whole hog because we have an election coming up and we’ve yet to negotiate an exit plan to actually go with this Brexit), based upon some figures that may be useful to you…
Long ago, back in July 2016 (seems like an age, right? Lots has happened since…), the high-profile fund managers Standard Life, Aviva and M&G suspended their property funds to safe guard the interests of their investors. A snap decision, but one that they thought necessary to protect themselves from the fall out of uncertainty. It was a move that created panic within the sector… yet 10 months on views are changing… So, what’s going on with Brexit?
The worst case, catastrophic consequences of ‘Brexit’ are that there will be 2 million fewer people in the UK. However, that may also not happen. The ONS suggests that there will be a further 210,000 households created a year up until 2039. Even with the falls in net migration there is still a need for roughly 300,000 homes to be created year on year to cope with demand.
If all of that seems like a troublesome conundrum, then this will add to this. It’s been estimated this week that there are an additional 400,000 people needed in the construction sector… combine that with the fact that leaving the EU will remove more of the workforce…
Another part of the equation is that as worries grow over the financial stability of Britain when we finally uncouple from the EU, there is potential for investment in building companies to decrease… think back to 2007/08, remember the cycle from last time?
So it’s not looking good for development, even though it is an area that needs to thrive. What this does suggest (and again my lack of a crystal ball may prove me wrong) is that even though the confidence in the built environment (or property industry) may look like it is suffering, this doesn’t over shadow the unbelievable demand out there for residential property.
Conclusion therefore draws that Brexit alone doesn’t seem to be the catalyst for the downfall in house prices… it will take something more catastrophic to bring that down… I’ll wait until the results of the general election come in to throw my hat further into the ring…!
How do you guys feel about Brexit are you worrying, or sat patiently waiting to see what happens as I am? Let me know in the comments section below, or share your opinions on our Property Investment Mastery Facebook Group…
P.S I’m excited to announce that on Monday we are starting a challenge over on the Property Investment Mastery Facebook Group to reignite or kick-start your property journey. Made sure you click this link and head on over there to find out more!