The UK Prime Minister has recently dealt with the fallout from the way in which she dealt with the decision to leave the EU. Her recent speech confirmed that the UK would not be re-joining the European single market and will put in place a trading agreement that will stand alone with the European Union.
The pound fractionally recovered against the dollar following concerns in the currency market but what impact will Theresa May’s speech have on property in the UK?
Adjusting markets and Brexit
The UK property market was unsettled by the Brexit decision with London really feeling the brunt of the impact. Any level of uncertainty is a problem for investment markets but now Theresa May has laid out her negotiation plans that will help the UK property market to adapt to these changes.
In fact, all eyes will be on the London property market when the trigger of Article 50 comes into play. Regardless of what happens, the European Union needs the UK while the UK needs the European Union. While ties will be severed, the relationship that has been in place for many years will still remain strong and that should help to steady the UK property market.
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EU citizens living in the UK
Immigration is forever in the news with the spotlight being on the topic over the past few months. The UK will have control of its borders once again but this does not mean that immigration will be reduced. The UK relies on immigration to plug the gaps in the employment market and taxation. Even if there is greater control over the borders and immigration, there will still be the high demand for property throughout the UK. This will mean that buy-to-let investors will be encouraged to purchase buy-to-let properties.
The UK Economy
Theresa May stated that she may consider looking at the levels of incorporation tax should an acceptable deal with the European Union be put in place. The thinking behind this is that it would give the UK complete control over corporation tax making it possible to charge less which would mean that the UK would be likely to attract multinationals to the country. This would lead to the European Union members being starved of income from tax that it needs not to mention the employment opportunities.
It has been a tricky time for the UK property market since the vote decided to leave the EU. However, slowly, the future of the UK and the negotiating tactics that will be used are becoming clearer. This will mean that investment markets can now plan ahead and take a clear view of the situation while also understanding that is natural for people to over-react in these instances. The speech from Theresa May should help to calm things down but the way in which the UK property market reacts will be interesting. In particular, it will be intriguing to see how overseas investors view the UK property market.