BREXIT – Property World Holds its Breath

Buy to let property has its predictable seasonal changes in activity almost every year, with summer holidays and Christmas naturally effecting people’s focus. The larger house builders generally have their financial year end in June and therefore their half year at the end of December which can bring new last minute buy to let property opportunities to the market often at the time when  buyers are focused on family commitments. However, here we are with a major decision to make, in or out? The whole EU debate has not caused any panic nor hasty decisions but what it is doing is making buy to let investors wait. Very few will commit to buy until they know which way the vote will go. The market is simply holding its breath.

Ten days ago I played golf at a charity golf day and on my team where a local developer, a local estate agent and the owner of a window manufacturing company that predominantly supplies to the house builder market. We were all broadly involved in the property/construction industry and all of us were reporting the same…everyone is waiting for the vote. The words holding their breath were mentioned more than once.

Over the past few weeks we have secured some of the type of discounted property that we know many buy to let buyers love to buy. Half a dozen new build freehold houses, discounted and with forecasted strong rental returns and ready to rent. The problem is that the regular, keen and motivated buyers are…yes you’ve guess it holding their breath and waiting for the EU vote. Whilst I understand some peoples caution what won’t change is the supply and demand and the rental market will continue to grow whatever happens to our EU membership.

Even our overseas companies are saying the same. It’s ironic that most of the overseas companies we deal with want Britain to stay in the EU but it is them that may well benefit from a LEAVE vote, even if it is only short term. If Britain leaves there will almost certainly be a sharp fall in the sterling market making assets and currency exchange rates cheaper to the direct benefit of those with foreign money. We deal with a growing number of ex-pat investors anyway and we expect this to continue to increase if the vote is IN or OUT but leaving the EU will give a short term boost to the buy to let market from overseas investors. Recent comment was “international investors will see the chance to pile in”.

The debate will go on and on and probably beyond the 23rd of June. Whatever happens there will be a great deal of finger pointing and accusations for a long time.

Construction will continue to feed the housing shortage and growing population. Rental demand will continue for the long term and the market needs buy to let buyers to ease this demand and to satisfy the savvy investor that the returns far out perform other investment options.


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