Beating the Brexit Blues with Gill Fielding in 2019

Frankly I’m completely bored and fed up with this Brexit nonsense. It’s been going on far too long and we’ve been fed lies and nonsense from the very beginning. At first it was the big red bus promising £350 million per week to the NHS (turned out to be a complete lie) and more recently a supposedly 33% drop in housing prices (which turned out to be nothing more than one of the parameters in an internal systems test).

Many of the lies and nonsense has been generated by speculation in some sections of the media whose sole intention is to instil fear and uncertainty and the media is simply taking that opportunity when nobody really knows what is going to happen. As a nation we’ve never been through Brexit before and consequently there is absolutely no certainty as to any specific outcome, change or result that might occur whether we have a hard, soft or no deal Brexit. Any prediction as to what might happen is purely a guess and as we’ve already seen over the last couple of years all guesses so far have been wrong. Frankly, I suspect that most of us will not notice a great deal of difference in our personal circumstances whatever the Brexit deal may be.

Rather than concentrating on speculation, suggestion and scaremongering why don’t we then just focus on the certainties that drive our financial environment and specifically our property market;

People still need to live somewhere! In terms of our housing market and availability of stock there can be no specific change. Our population isn’t suddenly going to increase or decrease dramatically and at the end of the day everyone needs a roof over their head. One of the big advantages of being a property investor is that housing is one of the fundamental needs of human being and therefore demand will always be there.
That demand does however fluctuate. We have heard a lot about immigration and the migrant population during the Brexit talks. What people seem to forget is that we’ve always had a migrant population: from the Caribbean migrants of the Windrush generation through to the Eastern Europeans of recent years. Even if there is a blockade on European migrants entering the UK we will still have our normal inflow from Africa, the Americas, Asia and Australia. It is likely therefore there will not be any significant change in the number of people entering the UK. It is estimated that only 39% of migrants actually come from the EU (ref: The Migration Observatory) and although Poland heads the list of originating countries: 2nd and 3rd on the list are India then Pakistan.
What uncertainty does to the general populace, however, is make them hesitant and frightened to take action. People who would normally be prepared to put down their savings to buy their own home no longer feel comfortable doing that. However, they do still need to live somewhere. Consequently, the demand for rental properties has reached an all-time high. When people are frightened to buy they have to rent and of course that is an ideal opportunity for the professional property investor to step in and provide appropriate housing.
As some of the 150,000 or so professional property investors operating in the UK, the current circumstances are providing a strong foundation to our businesses. Demand for our product (rental properties) has never been higher at a time when the cost of buying our stock (the properties) is relatively low. In this and any other business these circumstances are positive.
We professional property investors do however have to be flexible with our strategic plan. This is not the environment or the market to be concentrating very heavily on refurbishment and capital projects. This is of course the time to be concentrating on buying and holding housing stock for rental. Any sensible property investor currently is focusing on income rather than capital as a basic strategy. This should not be undertaken lightly and without appropriate education and support. Qualified professionals will always have the appropriate knowledge to be able to flex their strategy in accordance with current circumstances.
As far as the bigger picture is concerned the UK still remains one of the world’s financial centres as it has been for the last 500 years or so. When Forbes recently issued its ranking of countries in which to do business, the UK was top for the second year running: wages are outstripping inflation by about 1%; and although some city institutions will lose some clearing work, London is too important for it to be too affected. London ranks 2nd in the Global Financial Centres Index (behind New York). The next ranked EU financial centre is Frankfurt at 10th, and no other EU financial centre makes the top 20.
There is no such thing as complete certainty. One of the big positives I’ve seen in the last year or so is the number of people that are now prepared to take responsibility for their financial affairs rather than abdicating that responsibility to supposedly experts and advisers. Nobody cares quite so much about you and your family’s financial future as you and the sooner we all embrace some basic financial knowledge and education the better. I have seen huge improvements in the willingness of people to grasp this nettle since the Brexit vote happened.