There is an argument to suggest that property investors lost their trust in politicians many years ago. When they need money, and budgets are struggling, we have seen them knocking on the door of property investor’s time and time again. Increased taxes, new taxes, removal of tax breaks and in many cases being made out to be the devil incarnate across the media. However, recent events in the UK have taken this mistrust to a totally different level.
Brexit property investors
There are many factors to consider when investing in property; one of which is that property investors in the UK are now more detached from the political scene than they ever have been. Yes, they will obviously react to economic changes in the UK but their trust of politicians has gone, gone , gone. When you look at the UK property market, even areas where prices have seen falls or significantly reduced growth rates, many investors are sitting on the sidelines. We know that many sellers are also sitting on the sidelines looking for the “correct price” when markets do finally settle.
So, we know that politicians are very happy to tell us what they don’t wondered regarding Brexit but what do they want?
Independent strategies
If you talk to long-term property investors in the UK many are absolutely dismayed at the performance of politicians across all parties. Despite the fact that the UK voted to leave the European Union they refuse to follow the will of the people. We now have political parties suggesting they will cancel article 50 in the event that they are voted into power. While many will argue this happens all the time, investors today are making their own markets and ignoring the historic direction offered by politicians.
We know that some buyers are reluctant to invest ahead of the eventual Brexit end-game while many sellers are simply not willing to sell at current prices. As a consequence, a mix of domestic investors and overseas investors are left fighting for properties which do eventually reach the market. You will also have noticed that Mark Carney, the governor of the Bank of England, has come under extreme pressure of late over his forecasting abilities.
Do your own research
Never has the phrase “do your own research” been more relevant to investment markets that it is today. Politicians can shout, they can carry out votes against the will of the people but all you need to do is look at money markets to see where the clever money is going. Currency exchanges are a very useful indicator as are house prices and rental rates.
While many investors used to look towards the government for direction in the short, medium and long-term this has not been an option for some time now. The Bank of England has also gone down in the estimations of many having proved to be seriously wrong with historic forecasts. Despite the doom and gloom in the media it is worth noting that the UK population continues to grow, there is growing demand for private rental properties and we are literally tens of thousands of newbuilds short of the UK’s annual requirement.
Conclusion
It will be interesting to see how, and even if, the historic relationship between property investors in the UK, politicians and the Bank of England can be repaired. There is complete mistrust of politicians and while some Bank of England forecasts will grab the headlines, investors are becoming ever more sceptical of their forecasting powers. In essence, do your own research……….you are the only person you can trust.