Welcome to the Alibek Issaev property blog. Alibek Issaev is a businessman focused on value-added, targeting opportunistic real estate investments. In this week’s blog we focused about property investment in a post-brexit world. Read on to find out more..
On 23rd June 2016, the UK public voted – albeit by a narrow margin – in favour of leaving the European Union (EU). It was one of the most significant moments in recent British history, and during the two-and-ahalf years since the referendum, the topic of Brexit has never strayed far from the media spotlight. Exactly what impact the UK’s departure from the EU will have on the property market, and how investors can best plan for the future amidst the uncertainty it has caused, both remain topics of great importance.
These unanswered questions have been a source of uncertainty for people not only in Britain but internationally. Businesses, consumers and investors alike have been naturally hesitant in making major decisions, conscious of how economic landscapes and financial markets will change post-Brexit.
The survey of more than 500 UK-based real estate investors (all of whom own two or more investment properties) found that 39% plan to increase the size of their portfolio over the coming 12 months, compared to just 11% who intend to reduce theirs. Of the others, 25% do not intend to buy or sell any property in 2019, while 15% will be selling some assets to reinvest in new properties.
With 54% of investors looking to buy a property over the year ahead, and 89% either maintaining or growing the size of their portfolios in the next 12 months, the appetite for bricks and mortar investment evidently remains strong. Nevertheless, set against the backdrop of on-going Brexit discussions and the eventual realisation of this very public divorce, property investors must keep a keen eye on how these events will impact their financial decisions. Specifically, investors have to cogitate about how they can successfully navigate the real estate market in a post Brexit world.
To that end, calling on its years of experience and unique insight into pertinent industry trends, we have created a list of five of the most important factors to consider for post-Brexit property investment.
1. Consider all the assets available. Investors should avoid viewing property investment as a black and white decision between residential and commercial real estate. While these two umbrella categories incorporate the overwhelming majority of properties available on the market, there is also a growing demand for non-traditional property investments. Importantly, keeping an open mind to different categories of real estate will ensure an investor is well positioned to source the best and most appropriate asset for their particular goals, whether that is a regular source of rental income or long-term capital gains.
2. Look to regions of high investment Along with an open-minded approach to different asset classes and how to invest in them, an investor must also identify the right locations for his or her post-Brexit property purchases. Establishing the towns, cities or counties that have experienced the highest growth in property prices is relatively straightforward given the wealth of historical data available. And while the UK market as a whole has delivered very strong returns in this regard for many years – average house prices rose by more than £60,000 between 2008 and 2018 – some markets are growing at a far quicker rate than others.
3.Think about the medium to long-term plan As with any investment, when navigating the post-Brexit property market investors must be clear on their medium- and longterm plan, including how they will exit the investment. Having a clear plan that accounts for various market fluctuations and also provides multiple means of achieving financial returns will be of particular importance when investing soon after Brexit; a period when it will be hard to predict for certain how the industry will react to the challenges leaving the EU presents.
4.Choose the right partners to work with Brexit uncertainty does not just impact investors and their decisions – for better or worse, most businesses will also feel some effect of the UK’s decision to leave the EU. It is, therefore, important that investors choose the right businesses and partners to work with. This includes mortgage providers, estate agents, construction firms, developers and solicitors. Investors must select service providers that have the confidence and assurance to deliver what is expected of them irrespective of Brexit.
5. Do not abandon the basics Due diligence in finding the right asset, the right location and the right partners is essential; however, for all of the factors outlined in this report that ought to be considered, it is equally important for property investors not to lose sight of the basics. Whatever rumours or predictions surface in the media regarding the impact Brexit could have on the UK’s property sector, the fundamentals that govern this market are unlikely to alter dramatically. Namely, returns will be shaped by the balance between supply and demand along with the relative attractiveness of a particular property or location.
Alibek Issaev is a highly successful businessman and property developer. He has appeared on news as well as being featured in several newspapers. Read more about Alibek Issaev here and discover Alibek Issaev’s high yielding property news, insights and knowledge across all things UK property here. More from Alibek Issaev property investment options here.
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