Richard Butler Creagh: Is UK property still a good investment?

The UK real estate market is causing small letting agencies to face cashflow issues. The ban on charging fees impacts on the letting agencies because the cashflow and day to day running is financed via the fees. The main profit was made from the sale of properties, however, to allow this to happen the estate agents need to run their offices and cashflow may be a problem. This can consequently mean that the cashflow will have to be gained from the rent collected which may rise prices of letting properties. This will have a knock-on effect on lending secured properties as a gap between loan to value and the rentals needed to cover it will change. 

The rents are starting to rise in London, consequently making the London market a firm safe haven for investors. The Brexit Rolle roster did not affect as much as experts were anticipating – said London Today. London to an extent is governed by its own rules as the values of the properties are much higher than average prices outside London and most certainly in the North. People tend to park their capital in London. Like Paris and New York, is considered a place outside the crisis zone. While the situation in European markets is uncertain, the real estate market in the UK capital remains resilient and continues to attract the world's richest.

This situation is slowly changing. Brexit negotiations and political moves shakes the market. The suspension of parliamentary work is expected to last for at least a month, and its purpose according to the Financial Times is to "block the efforts of parliamentarians who hope to prevent a Brexit resolution without a deal." This is a realistic scenario, which envisages that on October 30 Great Britain will leave the EU without any agreements. As a result, all relations with the Union will cease to exist, this will cause chaos and of course an economic catastrophe.

Will London loos it safe haven status? Probably not. The property market is London is deeply rooted and while the prices can fluctuate it will not abolish the safe status. Companies are so deeply rooted in the UK that moving to somewhere else will not only cost but be problematic procedurally. It is a fact that Brexit is not a pleasant situation and it does steer the market and lives a lot of certainty.

Richard Butler Creagh has climbed many mountains in business. After a successful career in property development he understood the needs of the professional and their requirements in short-term bridging finance and devised a way that they could be better met in Henley Finance. Discover more about Richard Butler Creagh here. Comprehensive up-to-date news coverage of Richard Butler Creagh here.

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