With Britain on the way to reclaiming its sovereignty and domestic affairs from the EU after voting to leave in June 2016, with too most recently triggering Article 50 back in March, the land and property markets have been a mixed bag of feelings – apprehensive but forward – looking to what could be for their market.
Brexit is looking to remove various regulations placed upon the country by the European Union, whilst others are expected to be repealed, both for the land market and the property market. Some of this regulation in reference to the land market includes that farmers must leave at least 7% of their land untouched, which can be detrimental to small farmers with a low-income. Whilst another EU regulation sees landowners paid subsidies by the EU for keeping their land bare which, in the process, results in wildlife habitat destruction in order to clear the land to recoup the subsidy. Regulation too affects the property market but in a more concealed manner. The EU doesn’t have much of a presence in property law, leaving it to the member states, but its legislation in other areas have had implications for property investment. One of these legislation prohibits registering mortgages in foreign currencies, increasing the difficulties involved in investing into the country that you’re not based in. These two examples of two different policies and regulations are a view into what could soon be either removed or upheld as British law sometime in the near future.
The landscape of the land market so far this year has seen growth in house building slow down, even during a time in which the UK government has hoped on developers to increase the production of house building. This decrease, albeit a PMI of 52.2 from 52.5 in February, is minuscule, however, a slowdown in house building is a knock on effect to a slowdown in the amount of land purchased around the country – whether brownfield or otherwise.
The landscape of the property market so far this year has seen house prices fall for the first time in 20 months this Match, by 0.3% – apparent evidence of the increasing squeeze on consumers. House prices in the UK now average at £207,308. In February, house prices had risen by 0.6% and this decrease in property prices a month later was enough to surprise economists, who had forecast a 0.4% increase in prices. The decrease is said to have been due to a combination of rising inflation and weak wage growth. It is important to note though, that despite the decrease coming after 20 months of a gradual increase, economists do not believe there will be a housing crash and expect property to increase by around 2.5% in 2017.
The land market, although one that many may overlook, actually comes with many benefits and advantages for investing in. In 2017, as the date of Crossrail project begins to come to fruition before the opening later in 2019, the paths of investment heading alongside the route of this upcoming project, from Reading in the West to Shenfield in the East, could be significantly profitable for those who choose to capitalise on investing land within any areas in between. As more people will opt in to living around areas the new rail line features in to access faster travel into London and elsewhere, property developers are likely to swarm to such areas to build property that will best satisfy. The same story can be seen with the land alongside that of HS2 (High Speed 2), UK’s planned high-speed railway of which links London, Birmingham, East Midlands, Leeds and Manchester. A wise and daring land investor could even buy the land on the route of such line in order to sell back to the government at a later date when requested – land that its current owners may just be desperate to get rid of now.
With property, the same aspect applies to buying property along paths of investment for profitability, but it isn’t necessary always the case. Unlike land, property prices can fluctuate significantly more, and there are a lot of factors that can affect their desirability depending on what purpose the property serves.
However, buying property does have its advantages in the current climate. Despite a few minor setbacks, house prices have been ever-increasing with no sign of slow down, meaning your investment could easily pay off if you were to later sell such property in the near future. Demand is also very high for property. The population growth hasn’t seen a slowdown and housing supply is at a 100 year, meaning your purchase will be highly sought after.
Advantages of buying land includes the lack of a need for any maintenance, saving you money and time. There too are no bills to pay after the land is in your possession, unlike property, and it is also more “rare” thus more profitable; they aren’t making any more land, but they are making more property. You also have near to no competition to deal with and to outbid, as most investors will stick to what they know – property.
At the end of it all, what you choose to buy will be simply down to your own decision. There are both advantages and perks that are included with buying land and property, but both can be a risk. With huge financial purchasing power decisions, these deserve huge decision-making processes to ensure you get it right. Whatever you decide upon, we wish you the best of luck in your venture and offer you our options for land insurance and landlord insurance – ensuring your property or land is protected against any existential threats.