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UK Property Remains Attractive Despite Brexit Concerns, New Research Finds

UK Property Remains Attractive Despite Brexit Concerns, New Research Finds

Despite wider economic uncertainty caused by Brexit, a new survey suggests that investors are not shying away from the UK’s property market and won’t be changing their investment motives.

Summary:

  • New research suggests that the majority of British property investors have not let Brexit impact their investment decisions
  • Market Financial Solutions say that “Brexit-fatigue” has not affected real estate as an investment
  • The increase in population in northern UK cities continues to push prices up for purpose-built student accommodation and modern purpose-built residential rental property

57% of British property investors do not plan on changing their investment strategy, despite the extension of the UK’s Brexit deadline.

That’s according to a survey of 500 British property investors by bridging lender Market Financial Solutions.

The 2016 EU referendum was a landmark moment in UK and European politics causing a degree of economic volatility. However, the past 3 years have proved that the UK property market remains strong and stable and this is projected to continue, despite wider market uncertainties.

According to the findings, 64% of investors have not let Brexit impact their property investment decisions since the EU referendum in June 2016.

45% of the surveyed investors have expanded their property portfolio since the EU referendum, while just 7% have sold property due to perceived Brexit concerns.

In addition, 57% of investors said that they do not expect their property investment strategy to change following the Brexit deadline, which was originally scheduled on 29th March 2019. 29% actually stated that they were planning on making new property investments immediately following the original Brexit deadline date.

Paresh Raja, CEO of Market Financial Solutions stated that: “There is a sense of Brexit-fatigue setting in across most financial sectors. But importantly, today’s research demonstrates that appetite for real estate as an investment asset has remained strong.”

Raja also said that: “It is positive to note that the majority of property investors have been actively seeking new opportunities regardless of Brexit, and such buoyant behavior looks set to continue over the coming months. Although a degree of hesitancy at times like this is inevitable, the research underlines the long-term strength of bricks and mortar investment to weather such periods.”

Following the vote for Brexit in 2016, northern UK cities including Manchester witnessed an upward trend in average residential price. Manchester’s property market continues to outperform the rest of the UK, due to population growth outpacing property supply.

The increase in population, mainly coming from students and young professionals, is pushing up prices for purpose-built student accommodation and modern purpose-built residential rental property, and directly fuelling returns on investment.

Since 2015, the price per sq.ft. of new-build residential property in Manchester increased by 32% from GBP 250,000 to GBP 350,000.

Moreover, between 2016-2017 there was a 25% increase in UK student property investment. This indicates that demand for UK’s higher education is not affected by market uncertainties and continues to remain strong, making student property one of the most secure investments in the UK.

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