How Brexit might affect the property market, and their current investments and future investment plans, is something that all investors would like to be able to forecast. There are, of course, lots of ways of looking at this issue. But one way of looking at it is how Brexit might impact local economies, local employment levels, demand for property to buy and rent, plus capital values and rent trends. So in this report we will try to answer the question: How much might the property markets in different parts of the UK be affected by the economic impact of Brexit?
It’s probably true to say that over the last few decades most parts of the UK have developed trade links with the other EU countries to take advantage of the European Single Market. But it is also true to say this has not affected all parts of the UK evenly. Some places have eagerly embraced the opportunities in Europe while others have not. Some places have been expanding trade with the rest of the world much faster, while there are still some places which are not that reliant on international trade at all.
Therefore Brexit – and that is before we even consider whether it be hard, soft or in between – will most likely have a different impact on the economy and hence the property market in different parts of the country. While most places will be impacted to some extent, some places have the potential to be hit quite hard, while others could be cushioned from it. There are also places that may be in a good position to benefit from Brexit by capitalising on their links outside the UK.
So, let’s look at some figures and perhaps try to identify some risks and opportunities. The independent think tank Centre for Cities has done some research into the geographical and industrial make up of exports across UK towns and cities as part of their ‘Cities Outlook 2017’. They looked at what proportion of each location’s exports is reliant on the EU based on 2014 figures, and in addition the value of total exports per employee there, a kind of ‘export productivity’ if you like. They also drew on data taken from HMRC’s regional trade data and ONS estimates of services exports by region.