Brexit: EU property perspectives
Very few UK-based property and construction businesses expect growth through international expansion over the next twelve months, according to a survey conducted by audit, tax and advisory firm, Crowe Clark Whitehill.
The report shows that over 78% of participants had operations only focused in the UK, and despite over half (51%) expecting their business to grow in size over the next 12 months, only 10% expected this growth to come from growing oversees.
However, for those that recognized the prospects beyond the UK, Germany, Spain and the Netherlands were identified as having strong potential for international investment due to more stable legislative and economic systems.
Commenting on the findings, Heidemarie Wagner from Crowe Global Trinavis said: “In Germany we are seeing a persistently strong demand from international investors for residential and commercial properties.”
Mark Zijlstra from Crowe Peak also commented: “The Netherlands has a particularly favorable tax regime for investors. We expect the outcome of Brexit will most likely result in a further boost to the Dutch property market”.
Commenting on Spain’s property market Jesús Romero from Crowe Global Spain said “Low interest rates keep the cost of financing low and access to credit is expected to continue improving. We expect Spain’s property values to be reconsidered in the near future.”
Participants cited that uncertainly would discourage international operation until terms of the UK’s exit from the EU are clarified. From our sample there was a mixed view on Brexit’s impact on the property market. Over 22% of businesses expected UK operations to decrease and many listed the principal reason as Brexit. Comments included:
“Rapid change is never popular”.
“Uncertainty will likely outweigh entrepreneurial behaviour”.
“Brexit affects London’s position in Europe and the world”.
Looking further ahead, the 10% that voted Brexit as favourable to the market, identified opportunity for innovation:
“A good opportunity to take the heat out of an already overheated market”.
“UK now more attractive to foreign investors/buyers due to low sterling value”.
“Long-term will be positive but it depends on the UK and the EU being sensible in negotiations. I think most people want Economic partnership, not political”.