Brexit fears? Why you need to hold your nerve

Despite Brexit, major global players such as Boeing, Avon Cosmetics and the Pentagon have announced significant long-term investments in the UK. Senior management teams at Toyota, Nissan and Vauxhall also stated pre-Brexit that leaving the EU will make no difference to their growth and investment plans in the UK. And the Norwegian sovereign wealth fund, the biggest in the world, has confirmed it will maintain or increase its UK investments in the event of a Brexit. Do you think huge global organisations like this would be saying these things if they had any doubts about the UK’s long term prospects? Of course they wouldn’t. They would be jumping ship without hesitation.

 

This is why if you’re worried about Brexit and its impact, you need to hold your nerve. Yes, there will no doubt be a temporary pause in the momentum of the property investment market but once the dust has settled, the serious investors across the globe will raise their heads above the parapet and re-engage with the British property market simply because it is the most attractive and resilient property market in the world.

 

Once all the political turmoil caused by Brexit is stabilised the UK will effectively have the next two years to renegotiate its relationship with Europe and then start to build bigger and better trade relationships with the rest of the world. In the meantime, a weaker pound, the potential for a further interest rate cut and a new wave of quantitative easing could give a boost to the UK real estate market as investors hone in to take advantage of lower property prices.

 

Interestingly, during 2001-03 when the UK declined to join the Euro, many concerns were raised about the fall of investment in the UK with people fearing that investors would move their focus to the Eurozone. These fears were totally unfounded and during that period investment activity in the UK actually grew by 20%.

 

The UK has always enjoyed a strong share of real estate investment capital due to its transparency, liquidity, property laws, relative stability and openness to investors. Once the dust has settled, investors will be reminded of what drew them to the UK in the first place and the market will gain momentum again.

 

So, hold your nerve, there is light at the end of this tunnel, and we’re heading for it faster than you might think.

 

 

28 June 2016
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