Brexit has bred uncertainty for businesses across the UK.
Despite the 29th March 2019 deadline looming, we seem to be no closer to understanding the crux of what Brexit will entail for businesses UK wide.
As CEO of Hunter Jones, one of Europe’s leading experts in property-backed interest-bearing loan notes, I’ve had to analyse greatly the effects that Brexit could have not just on my business, but on the property development and investment sectors as a whole:
Short-term implications
The constant uncertainty surrounding Brexit means investors are likely to hold off and not invest as freely as they might have done previously. As a result, I believe that in the short term, the investment sector will slow down as people try get their bearings on our move away from the EU.
However, as the famous saying goes – wherever there is uncertainty, there is opportunity – and I strongly believe that, whilst some investors are waiting and sitting on their hands, others more inclined to take calculated risks will reap the rewards as a result.
My advice would be to keep abreast of the constant changes Brexit could mean for the property investment sector and ensure a contingency plan is in place for all investments. It is important to remember that property provides a long-term investment opportunity, and despite concerns over Brexit affecting the UK economy, it will remain a valuable asset class.
When continuing to invest over this difficult time for the UK, ensure to be diligent and do thorough research to continue seeking successful investments.
Looking further ahead
Taking a longer view for the property development sector, and particularly Hunter Jones backed developments, I don’t have a cause for concern, mainly due to the fact that all of our projects are within the rental sector.
The increasing demand for homes will continue to exist in the UK for the foreseeable future, and given that there is now a greater benefit to being a ‘Lender not a Landlord’, both Hunter Jones and the property sector will continue to grow, particularly with build-to-rent [BTR] schemes.
Despite worries about Brexit having an impact on the supply and demand for property space, with businesses threatening to leave the UK and seek pastures new in the EU, I firmly believe that, even within a weak or unstable market, areas undergoing positive infrastructure investment will still experience growth in both rental yield and capital gains.
A point to consider is that fewer people coming to the country from overseas could see a demand for property drop, but on the plus side the depreciation of the pound has made property investment a more attractive proposition in comparison to other expensive European cities such as Berlin or Paris.
Final thoughts
Property investors have two choices to make ahead of this crucial time for the UK: either pay no attention to the constant chatter on Brexit and focus on their own long-term returns or trade the market vigorously and astutely pre-empt what the move out of the European Union will mean for their investments.
This will involve analysing current structures and potential future scenarios which, for the savvy investor, should create a wealth of new opportunities, deal or no deal.
Reece Mennie
Reece Mennie is CEO at Hunter Jones, one of Europe’s leading experts in property-backed interest-bearing loan notes, with an established reputation in introducing clients to a vast range of profitable investment opportunities.
