How can you Brexit-proof your property investment?

With the current chaos swirling around Westminster – from the prorogation by Boris Johnson to this week’s Supreme Court ruling that it was unlawful, as well as ongoing uncertainty about Brexit and the prospect of a general election – it’s something of an understatement to say we currently live in uncertain political and financial times.

While the UK’s growth figures for July have eased fears that the country could slump into a recession, with the economy growing by 0.3% during the month, the public are still being cautious – especially with the chances of a no-deal Brexit still being relatively high. According to HomeWorkingClub.com, there was a 1,000%-plus increase in the number of people Googling ‘how to prepare for recession’ in the year to August 2019.

Although talk of a recession seems to have died down for now, there is still Brexit to contend with and for those investing in the UK’s property market the spectre of Britain’s departure from the EU has been something to deal with for more than three years now.

In spite of fears about Brexit’s potential impact, though, property prices since the referendum result was announced in June 2016 have actually risen from an average of £216,750 to £230,292, according to the government’s House Price Index.

This means that investors who ignored the dire warnings about the Brexit vote precipitating a housing market crash have seen an average 6.2% rise in the value of their properties since the outcome of the vote was revealed.  

But, with the future surrounding Brexit so uncertain – will it be no deal, a revised version of Theresa May’s deal, further extensions or no Brexit at all? – how can investors shield themselves from the uncertainty?

Independent property service Acentus Real Estate has a number of top tips when it comes to Brexit-proofing an investment. Firstly, its team recommends finding a city that is home to an expanding population and with a healthy, growing GDP.

Secondly, it advises that investors should focus on a city that has a diverse economy to ensure its economic success is not entirely dependent on one particular industry or sector.

Lastly, investors should consider how much the city is investing in its own regeneration – does it, for example, have big plans for the future? If this is the case, these plans could do a lot to support the future growth of the city’s housing market, especially in the immediate areas around any regeneration schemes.

What does the future look like for the property market?

While it’s impossible to predict for certain – with so many variables and uncertainties at play – property experts are generally best placed to predict what may happen in the future in terms of price growth.

Savills’ five-year forecast, for example, highlights the potential value of property investment in the UK's Midlands and Northern regions, with prices set to experience growth of 15.3% between 2019 and 2023 - higher than any other parts of the country.

International real estate firm JLL has also highlighted the potential of regional cities when it comes to the private rented sector, predicting average rental growth of 17.6% in Liverpool between 2017 and 2022.

“While Brexit does add an element of uncertainty into the proceedings, nobody can ever predict what the future holds, so investment always carries an element of risk. That said, property investment in the UK comes with some solid market fundamentals behind it. Not only that, but there are steps that you can take to minimize your exposure and essentially Brexit-proof your property investment!" Leanne Black, sales manager at Acentus, said.

Acentus points to Liverpool as one destination which represents a safe haven for investors. The city, which received significant regeneration and investment both before and after having the status of the European Capital of Culture in 2008, is currently thriving thanks to its cultural, sporting and leisure attractions, its sizeable student population and its increasing popularity as an employment and start-up hub.   

“If you're seeking a UK city that has all the right conditions for being Brexit-proof, so far as anywhere can be, then it has to be Liverpool!” Black added. “The city has such an incredible amount going for it, which is why it is booming in terms of both population and visitor numbers. It's the ideal place to invest in property in order to capitalise on the potential for both capital gains and rental yields.”

Zoopla research recently revealed that Liverpool is currently witnessing the strongest market conditions of any city in the UK, with strong price growth of 4.9% over the year to June 2019, while we recently outlined some of the regeneration works going on in the Liverpool area to further increase its appeal to investors.