The question – I have money in property and, post-Brexit, should we mortals be worried?
Many predicted before the EU referendum that a vote to leave would have a negative effect on the property market. Now that Brexit is set to become a reality, that has transferred into worry amongst many with a stake in property, which in turn could make the predicted negativity become a self-fulfilling prophecy. But is Brexit really a cause for concern for those who have money invested in property, or is there actually nothing to worry about?
A survey by the Bank of England shows that, whilst the housing market experienced a dip in its activity after 23rd June, transactions have gone against expectations and proven to be resilient. However, a report from the Royal Institute of Chartered Surveyors has revealed that both investor demand and confidence have dropped since the referendum, which has had a negative impact on commercial property. Whilst the average UK house price increased by 8.1% in the year to May 2016, there is currently no Office for National Statistics (ONS) data on average house price movements since the referendum as this will not be released until September.
To protect the interests of the longer term investor and to maintain liquidity, some commercial property funds have suspended trading since 23rd June and funds such as The Aberdeen Property Trust have lowered unit prices (a measure that is already being gradually reversed in some funds) in a bid to deter investors from withdrawing funds.
Whilst there’s no doubt that we are currently in a confusing time where the property market is concerned, it’s important to bear in mind that both the wider financial world and British life in general has experienced considerable changes following the referendum result.
Our simple message is – it’s understandable that there is uncertainty in times like these, but it’s also important to put things into perspective, the perspective of a balanced portfolio, and to keep that balance under regular review in the context of ever-evolving market conditions.
As always, if you would like to discuss any of the details contained in this article, please don’t hesitate to contact one of our qualified financial advisors at our Newbury office on 01488 608 686, or by using the quick contact form on our home page.
Please note, the value of investments, and the income from them, may go down as well as up. The levels and bases of taxation are liable to change.
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