At a recent joint Mazars, Innes England and Lloyds Bank briefing on the effects of Brexit in the Property sector, many positives were discussed which should provide comfort to ourselves and many of our clients. Nonetheless, the recurring theme was that, whilst overall activity remains busy, we shouldn’t underestimate the Brexit effect in the property investment market.
From 2015 – 2016, there has been a 25% drop in the investments market both nationally and in the East Midlands where the briefing was held. This drop could be attributed to U.K. Funds being net sellers and many funds simply taking stock in the aftermath of the June referendum.
On the bright side, occupiers and developers seem to have digested the initial shock: the phones are ringing and market values are holding up as many people don’t see alternative investments to put proceeds into. For example, the bulk private renting and build-to-rent markets are hot and pregnant with opportunity. Funders are keen and active as yields are about 5% net.
In addition, Local Authorities are looking to waive the affordable housing requirements which will support efforts to reduce housing shortages. The long term demographics of local areas and, in particular, retirement living schemes are irresistible to investors. McCarthy & Stone, to name just one investor in retirement living, have requirements in 60 towns and cities.