Brexit is here to stay and with a deal in place, everyone is wondering whether and how the UK’s departure from the European Union will have an impact on the property industry, especially after considering the impact of the pandemic and recent lockdown.
So, is using Brexit as a reason to put plans on hold a logical thing to do? Thankfully, the immediate economic crisis that was predicted by many in the event of a leave vote didn’t materialise. Perhaps the UK economy may turn out to be more resilient than some thought. Perhaps there will be challenging times ahead. But no matter how the economy is performing, good business sense is good business sense and that includes being receptive to innovative opportunities while balancing them with sensible risk management. That’s why we think investing in HMO properties offers significant potential with or without Brexit.
House prices
Well, chances are there won’t be many – if any – changes in house prices – at least not until the end of the Stamp Duty Holiday on March 31. Property transactions are likely to drop slightly which may, of course, reduce property prices (but albeit slightly). The property market is likely to pick up again in Summer, when the vaccine is rolled out and life starts to get back to ‘normal’.
Mortgages
Right now, interest rates are historically low and there have been suggestions they may even go into negative territory. Low Bank of England base rates mean affordable mortgages which means, in turn, more people are able to move home – or even get on the property ladder in the first place.
Buyer demand
The fact that people were desperate to move during the pandemic leads us to believe our official separation from Europe won’t have much of an effect. However, Brexit will likely affect the general economy, at which point people may get nervous about buying property out of fear of redundancies and increases in the price of food and other goods.
European tenants
Right to Rent checks remain in place for all citizens from the EU until June 30 this year – along with Norway, Switzerland, Iceland and Liechtenstein. After that, no-one knows what will happen as there is no current guidance from government. However, it’s believed landlords who rely on workers from the EU over the summer period, may now have to change their property strategy.
Get advice and help from Sourced
No-one really knows what’s going to happen between the next 12 to 18 months as the UK comes out of the pandemic – only to be confronted by what Brexit will have brought. There will be a ripple effect, of course, but whether it lasts or the UK manages to adjust quickly, remains to be seen.
Here at Sourced, our expert and experienced property investors have witnessed and worked through many fluctuations in the property market over the past three to four decades. Armed with experience and knowledge, we have prepared a business model which can help you achieve your financial goals while saving you time.
Our in-house specialists will help you build a profitable HMO portfolio that will generate 30% returns on your investment and a hands-off income. To find out how Sourced Franchise can help you generate an income from HMOs, download your copy of our Sourced Network prospectus.
Author
Chris Kirkwood
