Property Investment Since Brexit: What Has Changed? Should We?
What impact has Brexit had on investment and the property market? What can we do about it?
According to the BBC, the economy hasn’t changed at all. An article published on the 21st of September reads, “There has been little impact of the Brexit vote on the UK economy so far, says the Office for National Statistics (ONS).” (1)
Indeed, figures show “A total of 109,630 properties were bought in the UK during the month” which is a rise in comparison to last year, according to HM Revenue and Customs data. (2) The Guardian recently published an article entitled, “What Brexit Effect? Why British Consumers Still Spend, Spend, Spend?” According to the article, the 1.6% increase in retail sales volumes that are said to have happened over June, July and August is unsurprising, considering for seven years, interests rates remained at 0.5% until the Bank of England cut them to a new record low of 0.25% last month.” (3)
The pound is yet to recover and maintains its weakness against the US Dollar. Back in July, Business Insider UK noted the pound was in “Limbo Land” considering the level of uncertainty surrounding its future. (4) On the 27th of September, Pound Sterling Live published that the pound had fallen to €1.1472. (5) According to Patrick Graham at Reuters UK, Brexit “has been a rollercoaster ride for investors.” (6) Which is true, according to the BBC, as on the 26th of September, “the FTSE 100 ended down 91.39 points, or 1.32%, with only a few stocks rising.” (7)
In an article published by the Telegraph, Allister Heath writes, “The short-term effect of [Brexit] is almost entirely separate: it has more to do with fear and expectations than actual policy, given that nothing has legally changed yet and that City firms, manufacturers and the rest simply don’t know how their legal framework will change, if at all.” He continues, “The difference since June 24 is the uncertainty: companies don’t know what to expect.” He notes, “Some companies are now beginning to embrace the new order, and are doing what businesses are meant to: adapt to changing realities to maximise profits.” (8)
Perhaps though, consumers and investors aren’t the only ones to benefit from adapting to these “changing realities.” Despite their quiet desire to stay, Labour must also accept the circumstance and work with them, not against them. Olivia Bailey, the research director at the Fabian Society claimed “Labour must open its ears to the millions of leave voters who feel left behind and disempowered, and recognise that the party can never win if it only appeals to people who voted remain.” (9)
On a larger scale, the EU itself ought to be open to change. Only two weeks after the Brexit results were announced, The Wall Street Journal wrote that the EU should “learn” from the vote, and re-evaluate its own structure as a system.” (10) The article reads: “the EU must dispel the belief that integration reinforces the pressures of globalisation,” and also “reconsider the principle that all countries should move at the same speed,” because they don’t. The article also reads: “more and more European politicians are calling for the EU to respect the principle of subsidiarity, which requires that the EU take decisions only in areas where it clearly adds value.” These opinions were received positively by readers, with comments referring to the article as the only piece of Brexit analysis with “common sense.” This is important to know, as the general desire to adapt in accordance to the chaos is something the general public are calling for. (10)
Time will reveal the effects of Brexit, particularly once Article 50 is invoked. For now though, it seems the only current cure is a chameleon one: to adapt.
Written by Jenna Kamal
Sources
1) http://www.bbc.co.uk/news/business-37428764
2) http://www.bbc.co.uk/news/business-36956418
3) https://www.theguardian.com/business/economics-blog/2016/sep/15/what-brexit-effect-why-british-consumers-still-spend-spend-spend-retail-sales
4) http://uk.businessinsider.com/hsbc-research-on-the-pounds-future-after-brexit-and-the-eu-referendum-2016-7
5) https://www.poundsterlinglive.com/eur/5505-gbp-to-eur-forecast-week-ahead-3343
6) http://uk.reuters.com/article/uk-britain-sterling-idUKKCN11X0MT?type=GCA-ForeignExchange
7) http://www.bbc.co.uk/news/business-37470918
8) http://www.telegraph.co.uk/business/2016/07/28/whatever-the-impact-of-brexit-we-need-to-energise-our-economy/
9) http://labourlist.org/2016/09/labour-must-accept-the-referendum-result-fabian-report-says/
10) http://www.wsj.com/articles/adapting-the-european-union-to-the-world-after-brexit-1467834159
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