UK property law is domestic in nature and relatively untouched by the EU. Post-Brexit, the basics such as land ownership, landlord and tenant and Stamp Duty Land Tax levels will remain as they were – unless altered by our own Parliament.
Nonetheless, the EU has impacted on related areas. Potentially we could see a review of EU-driven laws affecting public procurement, planning and environmental laws. Property developers are particularly interested in the requirement for an environmental impact assessment on projects. In the absence of EU constraints, the Government may also want to take a look at areas such as Energy Performance Certificates, asbestos regulations, the impact of Transfer of Undertakings (TUPE) on investment transactions and the proposed restrictions on the letting of commercial buildings that don’t comply with minimum energy efficiency ratings.
The Leave campaign advocated the potential benefits to business of free trade and red tape reduction but it remains to be seen whether our Government has the appetite to review EU-driven legislation largely motivated by environmental considerations. It is more likely that we will see a reduction in new measures of this type; something that many in the real estate industry will welcome.
More significantly in the industry is the impact on the market. How will it settle down following the ‘knee-jerk’ reaction that immediately impacted housebuilder shares, property fund withdrawals, interest rates and the general momentum of both the commercial and residential markets?
Whilst the property market often reflects the ups and downs of the economy, property often fights above its weight as an investment. Property ownership benefits from an aspirational quality and is attractive to many because of the ability to directly control it as an investment (unlike shares or funds). Accordingly, whilst the property market is usually the first hit by economic uncertainty, rest assured that it is usually amongst the first to recover.