Is UK property headed for a post-brexit boom? If so, should investors buy now?
Is UK property headed for a post-brexit boom? We asked property expert Andy Foote, director at SevenCapital for some insight on the topic.
More than one third of property investors who invested prior to Article 50 being triggered have not invested since, according to research carried out earlier this year by SevenCapital.
The survey, which was commissioned through Censuswide, also found that, whilst three in five (60%) property investors have continued to invest since 2016, nearly one in five (17.1%) are waiting until after Brexit before they invest again.
Furthermore, of all those surveyed (both investors and non-investors), most believe that the market will make a strong recovery over the next three to five years’ time, with nearly two thirds (64%) saying they think the market position will be good to very strong.
These statistics, coupled with several reports from industry ‘experts’ suggesting investors are waiting for the outcome of Brexit, suggest that the UK property market could be gearing up for a post-Brexit boom.
But if we are set for a property boom after the UK leaves the European Union, pending agreement being reached, could investors fare better by buying now, during the uncertainty?
There is much speculation on both sides about whether the market will pick up immediately after Brexit, or on the contrary whether the market will take a sharp dip in the event of a no deal.
Amidst the confusion it’s easy to understand why those more averse to risk would want to wait until they feel they have a better understanding of which way the market is likely to turn in the event of Brexit. However, if we are set for a property boom in the aftermath, there’s a chance that those who have waited could end up paying a higher price when they do come to invest again.
It’s also worth bearing in mind the tactics some of the world’s most successful investors have followed, which include investing in a downturn when there is less buyer competition and as such more opportunity to negotiate a deal. Then you play the waiting game for the next 10 to 20 years as the market recovers and grows.
If you wait to invest and the market picks up, there will likely be less opportunity for negotiation and more competition for the best properties. In which case you may run the risk that the resulting return on your investment could work out less effective in the long run than if you’d invested sooner.
Ultimately, we still don’t know whether Brexit will even happen this month or at all, so the real question investors need to ask themselves is how much do they want to invest in property and how long are they planning to keep their investment for. If the answer to the latter is ten years plus, then whether the market does or does not dip in the near future, it will more than likely recover and deliver a good return in the long run.
So then why wait to invest, why not invest now and wait and give your property the longest possible chance to deliver the best return?
- The survey by SevenCapital questioned 450 high net worth individuals (defined as earning over £100,000 per annum) from the UK, Hong Kong, UAE and South Africa.
For more information on SevenCapital visit www.sevencapital.com.