Real Estate investment in Brexit
Real Estate investment in Brexit

Real Estate investment in Brexit

Real Estate investment in Brexit: It was initially feared that Brexit would result in a major change in business trends, with the mass exodus of organizations from the UK, particularly in the financial sector.

Leave to exist in small numbers, it did not materialize and business trends have not been significantly affected by Brexit. While Brexit may be a consideration for organizations when making decisions regarding real estate portfolios, it is unlikely to be the main factor.

In terms of pricing, a sustained adjustment has been made since the 2016 referendum and comments from experts suggest that Brexit prices have now hit the market, with no further impact on pricing expected.

Real estate funding

Availability of funds, particularly debt financing, is important for the proper functioning of the real estate market. With a lack of activity in the real estate market overall, lenders have focused on existing customers, with new lending declining significantly, due to a reluctance to refinance away from existing financing partners due to a desire for stability. 

Real estate development

Access to materials and supply-chain considerations will be a major factor influencing the impact of Brexit on the construction industry. New tariff arrangements and border checks can affect both the availability and timing of supplies and consequently the cost of materials can be much more expensive. Obstacles in the global supply chain from Kovid-19 will also exacerbate these issues.

The same is true for access to labor. A significant number of UK construction workers come from EU countries and it remains to be seen whether the post-Brexit construction industry will continue to have easy access to the large pool of skilled migrant workers from EU countries or whether it is time to Will be interrupted.

How will Brexit real estate affect the amount of inward investment?

Like all significant and structural changes, the impact of Brexit should be considered at two levels – short-term effects and medium-term effects.

In the short term, the Brexit process has generated an element of uncertainty that all markets hate. In the capital market, stocks have the value of periodic volatility and liquid investments such as listed debt and pound sterling. Such effects on demand are much less severe in relatively real estate classes such as commercial real estate.

Sterling’s effective devaluation has made UK assets more attractive in terms of short-term pricing for inward investors, although they also need to adopt a longer-term view of the UK economy after Brexit.

Many international investors, especially investors from the Middle and the Far East, therefore consider their markets and regions by comparison in an unfavorable light. This comparison will remain unaffected in the medium term and when one considers the amount of capital currently seeking access to the UK market, the maintenance of the amount of real estate investment is ensured.

What are the implications for financing UK commercial real estate?

Real estate finance has become available after the recession: Banks returning to the market have joined a group of new providers, including insurers, fund managers, and specially raised debt funds. Competitive pricing is back and loans are provided within the price range from “new normal” loans.

There is an argument that any distortion from Brexit will continue as long as the uncertainty of exit conditions remains unresolved and until the capital market adjusts to the new reality.

At the time, the UK economy and its real estate markets will once again be judged on the fundamentals of supply and demand and the process of “normalizing” interest rates rather than the impact of Brexit on sterling and capital markets.

Will Brexit have an impact on the planning process of development projects?

These directives have already been implemented through domestic legislation in the UK and the assessment procedures are well established.

The new commerce deal sets a specific relationship between the UK and the European Union, which is not based on a group of the European Economic Area (‘EEA’) and the European Free Trade Association (‘EFTA’). 

The UK is therefore likely to have more flexibility to shape its domestic legislation in the areas of Environmental Impact Assessment, Strategic Environmental Assessment, and Housing Regulations Assessment.

However, in our view, it is unlikely that this greater flexibility will result in radical changes, and the government is predicted to maintain environmental assessment requirements as part of the UK’s planning system. This is partly due to the government’s current attitude towards the environment and partly due to the need by the UK to continue to comply with its international treaty obligations.

For example, the Convention on Access to Information, Public Assistance in Decision Making, and Access to Justice in Environmental Affairs need public participation in environmental decision making and access to environmental data. These obligations are at least partially met through domestic legislation, which implements the Directives on Environmental Impact Assessment, Strategic Environmental Assessment, and Housing Regulations Assessment.

That said, going forward, the government will certainly have more room to change its approach to environmental assessment to suit specific circumstances. the UK.

Meanwhile, the Environment Bill, which aims to ensure that Britain maintains and improves environmental security after Brexit, is currently being considered by the House of Commons.

When the bill will receive royal approval remains unknown. In its latest form, the Bill sets out a framework for the introduction of legally binding environmental goals and measures about biodiversity, air quality water, and waste.

How is Brexit affecting the housing market?

We are continually aware of the property market that people will always want to move forward, whether we perform a real Brexit or not. Changes in personal circumstances, such as getting married, producing a new baby, or simply needing more space as children grow up, are always due to buying property.

Looking at market activity in the autumn and beyond, Kevin expects one of two scenarios. First, and most likely, is that the modern jump back proceeds until Brexit – and even over the Christmas period, given that those who are willing to move forward are certain. That form will include those that can be closed for some time. But now there is a dire need to move forward due to personal circumstances. 

They believe that this is even more likely to happen if the latter has seen properties that they would prefer to buy to be sold recently. When any other property bringing them comes to market, this time they don’t want to miss out, especially with the added reason that they can historically lock in low-cost financing.

However, in areas where there is scorching heat, things may slow down. For buyers, this will result in more attractive prices, while sellers will feel confident about the buyers’ commitment and will be less likely to exist after the deal is agreed upon.

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