KEY DETAILS FOR THOSE INVESTING IN THE UK ’S

PROPERTY MARKET BEFORE AND AFTER BREXIT

BREXIT & PROPERTY THE ULTIMATE GUIDE

E N T E R >

1. THE FACTS

The Facts 3-4

The Brexit Timeline 5

2. BREX IT ’S IMPACT ON INDUSTRY

Brexit’s impact on industry 6-7

Wavering confidence 8

Continued growth 8

3. HOW HAS THE UK ECONOMY COPED?

Brexit’s impact on sterling 10

Business growth 11

Unemployment 11

GDP 11

4. THE RETAIL SCENE

Retail sales overview 14

Retail winners and losers 14

5. THE HOUSING MARKET

House prices after the referendum 17

House prices – the last 12 months 18

Regional success stories 19

Construction output 19

6. INVESTMENT

Foreign direct investment 22

Property investment 23

7. REGIONAL SENTIMENT

Future prospects 25

Regeneration works 26

8. THE FUTURE

Quiet confidence 28

Expert opinion 28

Market fundamentals 29

9. BREX IT AS I T HAPPENS

December 2018 update 31

January 2019 update 32

March 2019 update 33

April 2019 update 34

April 2019 further update 35

C O N T E N T S

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T H E FAC T SOn 23 June 2016, the British public voted to leave the European Union, of which Britain had been

a member since 1973. The campaigns in the run-up to the referendum were hard fought and bitter,

with the flow of people and money between the UK and the EU becoming increasingly emotive

issues.

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The ‘leave’ vote carried by a narrow margin – 51.89% to 48.11%. Its impact was immediately felt as

then-Prime Minster David Cameron resigned. Across the five largest British banks, share prices fell by an

average of 21% on the morning of the referendum. The value of sterling plummeted, dropping 8% on 24

June, to its lowest level against the dollar since 1985.

The London Stock Exchange also suffered, with the FTSE

100 falling from 6338.10 to 5806.13 within 10 minutes of

trading opening on 24 June. Standard & Poor’s, Fitch Group

and Moody’s all cut the UK’s credit rating/outlook.

Since then, much has changed. This brochure looks at what

has taken place over the 18 months since the referendum

and what it means for the UK’s property market, particularly

from an investment perspective.

T H E F A C T S

5806.13Average fall in share price on the morning of referendumBritish public vote in favour to leave

FTSE 100 fell from 6338.10 within 10 minutes on day after Brexit decision

51.89% 21%

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23 June British public votes to leave EU

29 March British PM triggers Article 50, giving UK two years to leave EU

7 October Pound falls further as government announces ‘hard Brexit’ plan

13 November UK government announces draft Brexit deal has been agreed with EU

15 November Brexit Secretary Dominic Raab and Work and Pensions Secretary Esther McVey resign

25 November Summit of 27 EU leaders endorses draft Brexit deal

14 November UK government holds cabinet meeting to discuss draft deal

November Possible EU summit

29 March Parliament rejects Theresa May’s EU Withdrawal Bill for 3rd time

31 October New Brexit deadline

11 April EU grants Brexit deadline extension to 31 October 2019

11 July Theresa May chosen as PM

19 June Official Brexit talks begin with EU

13-14 December Last European Council of 2018, so last practical date a Brexit deal could be signed off

W/C 10 December 2018 UK parliament to vote on draft Brexit deal

19 March Decisive progress made in UK/EU talks

24 June Pound falls to lowest rate since 1985, UK PM resigns

9 June General election results in hung parliament; Theresa May remains as PM

11 December UK and EU move into next phase of talks

4 August Pound tumbles further after interest rate cut

29 October UK budget

13 December MPs agree that parliament will vote on final Brexit deal

21 January House of Commons approval of Brexit deal and passing of Implementation and Withdrawal Bill

14 March MPs vote to ask the EU for an extension to Article 50

16 January Prime Minister Theresa May’s government survives no confidence vote

12 March MPs vote to reject Prime Minister Theresa May’s EU Withdrawal Agreement for second time

3 April House of Commons passes bill to prevent no-deal Brexit

15 January EU Withdrawal Agreement resoundingly rejected by Parliament’s ‘meaningful vote’

2016 20182017 2019

T H E B R E X I T T I M E L I N E

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BREXIT’S IMPACT ON INDUSTRY

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The UK’s manufacturing sector seemed largely un-phased by Brexit in terms of

its output at first. By November 2017, nearly 18 months after the referendum,

the sector had recorded seven months of consecutive growth, with output

expanding at the fastest rate since 2008.

A boom in the production of boats, aeroplanes and cars for export, alongside renewable energy

projects, was responsible for the growth. Overall, output in the three months to November was

3.9% higher than a year previously.

3.9%3.9% overall output higher than a year previously

B R E X I T ’S I M PA C T O N I N D U S T RY

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Manufacturing sector accounts for roughly 10% of UK economy

Despite this positive growth, manufacturing confidence hit its lowest level since the Brexit referendum in August 2018. The Manufacturing Purchasing Managers’ Index, produced by IHS Markit and the Chartered Institute of Procurement and Supply, is the country’s most reliable indicator of the manufacturing sector’s health. In August it dropped to 53.0 (from 54.0 in July), with growth in production at a 17-month low. It was the first time since April 2016 that export orders had fallen and the sharpest monthly decline since 2011.

C O N T I N U E D G R O W T HConfidence rallied slightly in September

2018, however, with a figure of 53.8 for the

month marking the 26th consecutive month

above the neutral score of 50. Growth stood

at a four-month high, thanks to a notable

increase in new domestic and export orders.

Demand increased from the US, Europe,

Russia, Scandinavia and Canada.

Overall, the UK’s manufacturing sector has fared

well since the Brexit referendum. Despite some

wobbles, the sector – which accounts for roughly

10% of the UK’s economy – has remained in a

growth phase, which has had a knock-on effect

on employment. The spectre of a no-deal Brexit

is causing some anxieties, but it is hoped that

confidence will surge once more as soon as a deal

is agreed.

26th Consecutive month above the neutral score

W AV E R I N G C O N F I D E N C E

26th 10%

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HOW HAS THE UK ECONOMY COPED?

In many ways, the UK economy has bounced back from the immediate aftermath of the decision to

leave the EU. The London Stock Exchange was one of the first to recover from the shock, with the FTSE

100 rising above pre-referendum levels by 1 July 2016. In fact, it hit a ten-month high, with its largest

single-week rise since 2011. By 11 July, it was officially back in bull market territory. On 27 July the

FTSE 250 also moved above its pre-referendum level.

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The pound has fared less well. Following its fall to its lowest value against the dollar since 1985 in the

immediate aftermath of the Brexit referendum, it suffered further setbacks as a result of the political

decisions and wrangling that followed. Most notably, an interest rate cut to 0.25% on 4 August 2016

caused sterling’s value to plummet. Speculation that the UK would be pursuing a ‘hard Brexit,’ including

leaving the EU single trade market, caused a further drop of 6% on 7 October 2016.

Over the course of 2017, the pound fluctuated significantly as a

result of ongoing Brexit negotiations. However, its value at the start

and end of the year was much the same – standing at $1.23 on 1

January 2017 and $1.35 on 31 December 2017.

At the time of writing, sterling has still not managed to climb back

to its pre-referendum value against the dollar or the euro. While

this hasn’t been ideal for those within the UK who have bought

goods and services in dollars or euros since the referendum, it

has made the UK an attractive prospect for overseas investors.

$1.35

1985

0.25%

The pound fluctuates significantly standing at $1.35 on 31 December 2017

The pound fell to its lowest value against the dollar since 1985

Interest rate cut to 0.25% on 4 August 2016 caused sterling’s value to plummet.

B R E X I T ’S I M PA C T O N S T E R L I N G

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The International Business Times flagged up British

aerospace and defence firms, pharmaceutical companies

and professional services companies as some of those

most likely to benefit from the weaker pound. The Office

for National Statistics (ONS) has confirmed that the level

of business in the UK grew during 2017, with quarters

two and three (covering the period of April to September

2017) proving the strongest.

The UK’s unemployment rate has fallen steadily since the

Brexit referendum, dropping from 4.9% in June 2016 to

a rate of 4% in the three months to August 2018. That 4%

represents the lowest unemployment rate in the UK since

1975.

Gross domestic product (GDP) has also continued to

rise since the referendum. It has been on an upward

trajectory since quarter one of 2013, according to

the ONS. The latest quarter for which figures are

currently available (quarter two of 2018) saw GDP

growth of 0.4%.

While nobody can know what the Brexit process will

bring when the UK leaves the EU in March 2019, the

country ’s economic progress since the referendum

means that it is in solid shape. The raising of interest

rates by the Bank of England in November 2017, for

the first time in a decade, is testament to that.

B U S I N E S S G R O W T H

U N E M P L O Y M E N T

G D P 4.0%4% represents the lowest unemployment rate in the UK since 1975

0.4%Increase in GDP growth of 0.4% for Q2 2018

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THE RETAIL SCENE

Britain’s retail sector was one of the most affected industries following the Brexit referendum. The sector

is the country ’s largest private employer, with some 3.3 million employees in 2017, according to The

Retail Appointment. With around a third of those employees under the age of 25, the retail sector is

particularly important to younger workers. Overall, more than a third of UK consumer spending goes

through the country ’s shops.

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Largest UK private employer with 3.3 million employees in 2017

3.3m

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While buyers from overseas have kept the property market buoyant and enjoyed the

weaker pound since the Brexit referendum, British consumers have been tightening their

belts. Sales have still been rising – they were up 1.6% in January 2018 compared to

January 2017 – but at a slower pace than expected. Retails sales by volume grew by

0.1% in January compared to the month before, when a Reuters poll of analysts had

projected 0.5% growth.

High inflation and stagnant wage growth were cited as the causes of the retail

slowdown, with mention of Brexit never far from the explanations of the worse-than-

expected figures.

Interestingly, it has been clothing and food that UK consumers have cut back on in the

run up to Brexit. August 2018 figures from the Office for National Statistics show a

0.6% drop in the quantity of food bought, when compared to the month before, while

clothing sales dropped by 1.9%. Growth in other areas though (notably household

goods stores, which enjoyed an increase in sales of 4.5%), meant that the retail sector

continued to grow in August, with the quantity of goods purchased up 0.3% month-on-

month. Indeed, many analysts are still hopeful that the UK retail sector can end 2018 on

a more positive footing.

Retail sales up 1.6% in January 2018 compared to January 2017

Retail sector was one of the most affected industries following the Brexit referendum

1/3 of employees under the age of 25

R E T A I L S A L E S O V E R V I E W

R E T A I L W I N N E R S A N D L O S E R S

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“Looking ahead, we should expect the squeeze on consumer spending from high inflation to ease as we progress through this year. But the economic benefits of lower inflation are unlikely to be felt until the second half of 2018 at the earliest. The first half of this year will continue to be a difficult environment for retailers and other consumer-facing sectors.”

Andrew Sentance, senior economic adviser, PwC

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THE HOUSING MARKET

There was much talk around the time of the Brexit referendum that a vote to leave Europe would

trigger a housing market crash. However, the country ’s housing market is not so quick to react

as its stock exchange. No crash occurred. Instead, growth eased slightly in some areas – mainly

London and the South East, both of which were due a lit tle adjustment anyway.

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House prices had been on an upward trajectory before the Brexit referendum and largely continued

on that trajectory following the vote. Halifax recorded a two-month dip, with the average value

reducing from £216,829 in June 2016 to £213,829 in August 2016 before rising once more.

Land Registry data shows a relatively flat period from June 2016, when the average value was

£215,182, to March 2017, when it stood at £215,216. Nationwide’s figures reflect similar small

fluctuations, from £204,967 in June 2016 to £205,846 in February 2017. All three indices then

show prices continuing largely on an upward trajectory to date.

3.6%UK house prices rose by 3.6% in the year to August 2018

H O U S E P R I C E S A F T E R T H E R E F E R E N D U M

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According to the Hometrack UK Cities House Price Index, UK house prices rose by

3.6% in the year to August 2018. Only three cities experienced falling prices over that

period: London, with a fall of 0.3%, Cambridge, at 0.1%, and Aberdeen, where prices

dropped by 3.7%. However, for the three months to August 2018, all three of those

cities experienced price rises, of 0.8% for London, 1.0% for Cambridge and 0.2% for

Aberdeen, indicating that any correction may already have played itself out.

H O U S E P R I C E S – T H E L A S T 12 M O N T H S

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At the other end of the housing market, regional cities such as Birmingham, Manchester, Newcastle and

Liverpool have been enjoying healthy property price increases since the Brexit vote. Prices in Liverpool rose

by 7.5% in the year to August 2018, while in Manchester they rose by 6.8% and in Birmingham by 6.6%. In

Newcastle, property price growth stood at 3.3% for the year.

Construction output did not fare so well following the Brexit vote,

falling by 2% in the three months to November 2017 and by 1%

in the three months to January 2018. According to the Office for

National Statistics, “The largest downward contribution to change

in the rate came from prices for motor fuels.”

Despite construction being down overall, the housing sector again

showed its resilience. In the three months to November 2017,

when construction output overall fell by 2%, there was a 1.2%

increase in the construction of new housing. The figure is testament

to developers’ continued faith in the potential of the UK housing

market, irrespective of Brexit. After all, the market fundamentals

have not changed. The UK still has a rapidly growing population

and a chronic undersupply of housing, particularly in busy urban

areas. These factors remain the same, whether or not the UK is a

member of the EU.

+1.2%Increase in the construction of new housing in the 3 months to November 2017

R E G I O N A L S U C C E S S S T O R I E S

C O N S T R U C T I O N O U T P U T

UK CIT Y HOUSE PRICE GROWTH INCREASE

+6.6%+6.8%

+7.5%

BIRMINGHAM MANCHESTER LIVERPOOL

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INVESTMENT

Investment in the UK has been something of a mixed picture since the Brexit vote. On the one hand,

figures show that investors have withdrawn £10 billion from UK equity funds since the referendum

(according to October 2018 figures from the Investment Association).

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“As the March 2019 Brexit deadline

looms, investors are seeking to diversify

and manage their risk with global and

mixed asset funds attracting strong

inflows, as did volatility managed funds.”

Chris Cummings, Chief Executive, Investment Association

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At the same time as equity funds have suffered, the number of foreign direct investment (FDI) projects in the

UK has risen. According to Trading Economics, with the exception of the first quarter of 2018, UK net foreign

direct investment has risen every quarter since the Brexit vote. Quarter 2 2018 recorded a rise of £22199

million – the highest level since the end of 2016.

In fact, FDI has increased to such an extent in some areas that

UK cities have been catapulted onto the global stage. The

Manchester-Liverpool metropolitan area attracted 68 foreign

direct investment projects in 2017, which IBM says places it tenth

in the world for the volume of FDI. London topped the ranking,

meaning that the UK took two of the top ten global FDI spots (the

only other country with more than one city in the rankings was

Germany).

£22,199m

10th

London topped the ranking, meaning that the UK took two of the top ten global FDI spots

Quarter 2 2018 recorded a rise of £22,199 million, the highest level of FDI since the end of 2016

The Manchester-Liverpool metropolitan placed tenth in the world for the volume of FDI in 2017

F O R E I G N D I R E C T I N V E S T M E N T

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In terms of property investment, the UK’s credentials have remained

sound since the Brexit referendum. Regional cities continue to offer

healthy yields to those looking for the right properties in the right

locations.

8.2%Highest yield in Liverpool since Brexit Referendum

M A N C H E S T E R

B I R M I N G H A M

L I V E R P O O L

N E W C A S T L E

L O N D O N

C I T Y L O C AT I O N L O W E S T Y I E L D H I G H E S T Y I E L D

3 . 3 %

2 . 5 %

3 .1 %

2 .9 %

2 . 4 %

7. 2 %

6 . 4 %

8 . 2 %

7.9 %

5 . 2 %

P R O P E R T Y I N V E S T M E N T

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REGIONAL SENTIMENT

It’s fair to say that most of the UK’s key regional cities wanted to remain in the European Union.

London, Manchester, Newcastle and Liverpool all voted to remain within the EU. Birmingham voted to

leave, but only just – by 50.4%, with a margin of just 3,800 votes.

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All five of these cities have a thriving, dynamic business base and a strong case for the continued

viability of their housing markets. They are some of the top locations in the country for university

places and all have sizeable student populations, which is good news for investors, according to

Totally Money:

“Our research shows university cities have some

of the highest rental yields, with Liverpool,

Manchester, Middlesbrough, Newcastle upon Tyne,

and Edinburgh shown to be top performers. Due

to new students arriving in these cities year after

year, there’s no shortage of tenants for landlords to

choose from, making void periods very unlikely.”

Many of those students choose to stay on in the cities in

which they studied, adding their talent and enthusiasm

to the local urban workforce. Most young professionals

rent their homes, further fuelling demand for city centre

properties in these regional metropolises. Together, these

demographics do much to strengthen the Brexit-proof

investment case that the UK’s regional cities offer.

F U T U R E P R O S P E C T S

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NEWCASTLE

LIVERPOOL

MANCHESTER

BIRMINGHAM

LONDON

The UK’s regional cities are also benefitting from substantial investment in their regeneration, both before and since the Brexit referendum. Birmingham’s 20-year Big City Plan is creating 1.5 million square metres of new floor-space and over 50,000 new jobs, while contributing £2.1 billion to the economy each year.

Manchester’s ambitious regeneration plans have seen

it rise to be ranked as the UK’s most liveable city in the

Economic Intelligence Unit’s 2018 Global Liveability Index.

Liverpool, meanwhile, has seen development work valued

at a minimum level of £500 million take place each year

since 2008, while Newcastle has been noted for having

one of the fastest economic growth rates of any city in the

UK.

R E G E N E R A T I O N W O R KS

£2.1bn 1.5mBirmingham’s Big City Plan will contribute

to the economy each year

Square metres of new floor-space and

over 50,000 jobs

Newcastle has one of

the fastest economic

growth rates of any city

in the UK

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THE FUTURE

Nobody can say for sure what the future will bring. Three years ago, few people would have

predicted that the UK would be just months away from leaving the EU. However, experts in certain

fields have become renowned for their savvy scenario planning. JLL is one such organisation – it’s

housing market projections are based on solid data and years of experience.

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JLL projects that “subdued consumer and household confidence” will lead to relatively slow

house price growth as the UK approaches the Brexit deadline: growth of 1% in 2018 and 2%

in 2019. It projects growth of 2% per annum for rents. As consumer confidence settles post-

Brexit, house price growth should rise to 3.5% pa by 2022, with rents growing at a steady

rate of 2.5% pa from 2020 to 2022.

The team here at Surrenden Invest echoes JLL’s confidence. The

UK’s housing shortage will still exist after March 2019 and will be

particularly notable in regional cities. While London’s market is

uniquely vulnerable – particularly the prime central London market

– due to its high prices, key regional markets still have room for

growth when it comes to property prices.

Investors who bought property in cities like Birmingham,

Manchester, Newcastle and Liverpool after the Brexit referendum

have already seen impressive capital growth over the past 16

months. With rising population numbers and affordable property

prices, these markets continue to offer the same strong credentials.

3.5%

2.5%

Birmingham, Manchester, Newcastle and Liverpool have already seen impressive growth over the past 16 months.

House price growth should rise pa by 2022

House rental rates pa from 2020 to 2022

Q U I E T C O N F I D E N C E

E X P E R T O P I N I O N

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Ultimately, Brexit may make buyers a lit tle more cautious, which is no bad thing – it means that

investors will ensure they undertake appropriate due diligence and opt for high quality developments.

It’s a matter of perspective and of identifying what will and won’t change in terms of market

fundamentals. City centre regeneration work, for example, will continue post-Brexit and will act as a

catalyst for property price growth for nearby homes.

UK property is an outstanding investment asset and will

remain so after the country leaves the EU. Any drop in

sterling’s value is likely to lead to a flurry of property

purchases by overseas investors, just as it did following

the Brexit referendum.

While nobody has a crystal ball, it should be remembered

that property is an asset that has grown by around 8% per

year on average for the past 65 years. There’s no need for

investors to speculate on short-term fluctuations. The UK has

a mature, stable property market, regardless of its position in

(or out of) the EU.

M A R K E T F U N D A M E N T A L S

Property is an asset with an average growth per year for the past 65 years

8.0%

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BREXIT AS IT HAPPENS Just days after our last update, everything changed again, with EU

leaders voting to grant the UK a further extension to the Brexit deadline.

Let’s take a look at how this is likely to impact the property market.

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It’s been a busy month in Brexit terms. On 13 November, the UK government

announced that it had agreed a draft Brexit deal with the EU, covering the

arrangements for the UK’s departure. The following day, a five-hour Cabinet

meeting ended with rumours of arguments and tears, despite PM Theresa May’s

announcement that the “collective decision of the cabinet

was that the government should agree the draft withdrawal agreement.”

“collective decision of the cabinet was that the government should agree the draft withdrawal agreement.”

The morning of 15 November saw Brexit

Secretary Dominic Raab resign in protest at the

bill that he had spent months working to produce.

Work and Pensions Secretary Esther McVey

resigned a short while later.

Ten days later, on 25 November, an emergency

summit of 27 EU leaders was held, resulting in

their endorsement of the draft withdrawal bill.

When it comes to the UK’s housing market, the

latest figures show that house prices have fallen

in just one city (Aberdeen) between the Brexit

referendum and October 2018.

In London, where there has been a slowdown of

the market since the referendum, prices are now

rising once more albeit slowly – at 0.3% over

the past quarter and 0.1% over the past month,

according to Hometrack.

In terms of the wider economy, sterling showed

its sensitivity to the Brexit process once again,

dropping nearly 2% against the dollar as a result

of the mid-November Cabinet resignations. Despite

that, employment remains high and the economy

continues to grow at a healthy pace, meaning that

the UK remains on a solid footing as the Brexit

process continues to unfold.

D E C E M B E R 2 018 U P D A T E

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BirminghamEdinburghManchesterNottinghamSheffieldLeedsLiverpoolPortsmouthBournemouthCardiffGlasgowBelfastSouthamptonBristolNewcastleOxfordLondonCambridgeAberdeen

Earnings growth5.2%

-10 -5 0 5 10 15

As was widely expected, MPs rejected Prime Minister Theresa May’s EU Withdrawal

Agreement during their vote on 15 January. Theresa May, who survived another No

Confidence vote the day after the Withdrawal Agreement vote, now has just days to pull

together a second option for Parliament to consider.

As was widely expected, MPs rejected Prime Minister Theresa

May’s EU Withdrawal Agreement during their vote on 15

January. Theresa May, who survived another No Confidence

vote the day after the Withdrawal Agreement vote, now has just

days to pull together a second option for Parliament to consider.

The immediate impact on the UK economy of the bill’s defeat

has been a positive one. The stock market simply shrugged off

the news, while the pound’s value rose. When it comes to the

housing market, the reaction is not so quick to appear. What

we have seen in recent months is a general air of caution and a

slowing down of the market – it seems that the housing market

is holding its breath to see what’s going to happen come 29

March.

Within this cautious environment, there are still plenty

of interesting opportunities and areas to watch. The

North East region, for example, which is home to fine

developments such as Hadrian’s Tower in Newcastle,

saw a 1.2% increase in property prices between

October and November 2018 alone, according to the

government’s latest House Price Index. For the country

as a whole, the data shows an increase of 2.6% in

property values in the year to November 2018.

J A N U A RY 2 019 U P D A T E

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Following MPs’ second rejection of Theresa May’s EU Withdrawal Agreement and their

decision to take a ‘no deal’ Brexit off the table, the latest debates and votes have led the

Prime Minister to head back to the EU. She is now tasked with trying to negotiate an extension

to the withdrawal date of 29 March, should she still not be able to pass her Withdrawal

Agreement – something which seems unlikely, given the two defeats it has already suffered

and MPs’ increasing confidence in ignoring party whips when it comes to Commons votes.

Birmingham is a case in point, meaning that developments such as the ultra-prime No. 76 Holloway Head continue

to offer an exciting opportunity to investors looking to profit from the UK property market, whether before or after

the Brexit withdrawal date.

The pound took the news of the latest rejection of the

bill and the potential delay to Brexit badly and with

the situation seeming to change almost by the hour,

plenty more volatility is to be expected over the course

of the coming days and weeks. The stock market has

fared somewhat better, though again volatility is

expected as the Brexit process continues to unfold.

The property market continues to experience rising prices

despite the turmoil, with Rightmove reporting a 0.4% increase

for the past month. Though the rate of growth is slower than

the spring uplifts of recent years have seen, prices are still

increasing, with the correction being experienced in London and

the South East balanced out against strong market fundamentals,

including a years-long undersupply issue, which means that

prices in other areas continue to enjoy rapid rises.

M A R C H 2 019 U P D A T E

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Since our last update, MPs have rejected Theresa May’s EU Withdrawal Agreement for a third

time, with Parliament still deadlocked as to how to move forward. In an unprecedented move,

MPs took matters into their own hands, voting to take over the parliamentary timetable in

order to move the Brexit process forward. Their goal was to find an option – any option – that

the majority of MPs would back.

After much discussion and indicative votes on no

fewer than 12 possible ways forward (held over

the course of 27 March and 1 April), the result is

a continuation of the deadlock, as the House of

Commons fails to progress the Brexit process as well.

In the latest twist, on 3 April, the House of

Commons passed a bill to prevent a no-deal Brexit,

meaning that Theresa May must seek an extension

to the 12 April Brexit date – assuming that the bill

passes the House of Lords, where it will likely be

debated on either 5 or 8 April.

The Commons’ approval of the bid to delay Brexit saw the pound fall

against the euro, as sterling continues to show its sensitivity to the

political upheaval. The housing market, in contrast to this, is holding

firm, with HMRC data showing an increase in transaction volumes

during the first two months of 2019. The Hometrack UK Cities House

Price Index, meanwhile, shows UK house price inflation of 3.2% for

the year to February 2019, with all cities recording positive house

price growth. Even London, which saw prices fall during 2017 and

2018, registered growth of 0.4% during February.

The real success stories though, in terms of house price growth,

have been the country ’s regional cities. Since the Brexit referendum

in June 2016, both Leicester and Manchester have recorded price

growth of 17%.

A P R I L 2 019 U P D A T E

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At the time of our last update, Prime Minister Theresa May was on her way to Brussels to ask for

another delay to the Brexit deadline. On 11 April, her request was granted, with the EU voting

to extend the Brexit deadline to 31 October 2019. The delay provides the UK with a further six

months to get its (political) house in order and sort out some kind of orderly exit from the EU.

In an indication that the EU’s patience is wearing thin,

European Council President Donald Tusk issued a warning

alongside the extension: “Please do not waste this time.”

The UK government’s response? To take a break for Easter.

Politics aside, the Brexit extension has a number of

implications for the UK economy. Investors’ appetite for

sterling has been muted by “the prospect of prolonged

uncertainty and Brexit fatigue,” according to the Financial

Times. The FTSE 100, meanwhile, opened down 0.2%, with

many investors having already seen the writing on the wall.

The impact on the housing market is already being seen.

Ongoing uncertainty is never good, but the fact that the

extension is for six months – and that Donald Tusk has not

ruled out further extensions – is causing many buyers to

shrug off their pre-Brexit nerves and move forward with

their home purchase plans.

According to Righmove, the average price of properties coming

onto the market rose by 1.1% in April – the biggest April uplift

since 2016 and the largest monthly increase since March 2018.

It seems that both buyers and sellers have had enough of

putting their plans on hold in order to accommodate Brexit. As

such, it’s likely to be a fairly normal summer for the UK housing

market, although the number of properties coming to market

remains somewhat muted compared to this time last year.

In terms of investment properties, the North West remains an

attractive prospect, with the latest HM Land Registry House

Price Index flagging it up as enjoying the largest monthly and

annual price rises of any English region, at 1.3% and 4.0%

respectively. Those looking to be part of the North West’s future

success are invited to consider The Tannery, which offers

superb apartments from as little as £85,000.

A P R I L 2 019 F U R T H E R U P D A T E

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We make no representation or warranty of any kind with regard to the information contained in this brochure and none of the information shall be treated as financial advice. The information

is not an invitation to invest and you must rely entirely on your own investigations and due diligence before making the decision to invest. Any opinions expressed in this document are not

statement of facts.

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