The results are in! The British public has voted to leave the European Union, making it the first major nation to do so. But what are the consequences this decision will have for investors?
First and foremost, it should be pointed out that currently any future developments are still very uncertain with no script or historic event to take any advice from.
However, what is it that investors can take away from this result?
To begin with, it might be important to state that property has proven itself to be one of the most stable asset classes for investors. This is mainly due to the fact that people need houses. And that will never change.
This becomes especially important in the British market, where Generation Rent has experienced a significant growth over recent years. The growth of a whole generation reliant on rental homes means the sector is becoming a driving factor in Britain’s economy. More specifically the private rented sector.
Investors should keep a close eye on any decisions the Bank of England is making regarding interest rates.
Foreign investors, however, might find the perfect time to invest in property is right now. With the Sterling experiencing the biggest drop in a single day over the last 30 years, foreign investors can get a lot more bang for their buck at the moment than they could a week ago and can again a couple of weeks from now.
On top of that, there are still all the reasons investors put their money into property mere weeks ago. The gap between demand for appropriate housing and supply keeps growing.
Even if the UK closed all of its borders completely, the housing situation wouldn’t improve significantly. The population will keep growing regardless. British citizens will continue to grow older, more babies will be born and 25% of occupants are already living on their own.
The biggest financial difference might be noticeable in London when considering investing in property. London, however, also bears the biggest risk for a Brexit future, making other UK areas more and more appealing for investors. Cities like Manchester will become more significant as a nation that wants to thrive on its own can’t just rely on one city for economic output.
The Northern Powerhouse, with Manchester at its centre, has proven that it will be a massive contributor to the British economy. Investment in Manchester has been unprecedented in the last twelve months, with Media City announcing to double in size in the near future. And the fact that the referendum results were announced in Manchester’s Town Hall is only the icing on the cake.
In or out, supporter or opponent, none of this will change one thing: The British property market. A stable beast that will continue to grow.
