Like the financial markets, property investors prefer a clear cut result. Clarity of outcome is good for lucidity of thought and action. But a minority Conservative government is unsettling all round. Not knowing whether Brexit plans will get implemented as intended, or whether everything will end up so watered down, as to be meaningless, plays on investor minds.
Uncertainty over whether the political landscape could change again shortly also means that investors like you feel nervous and may not know what type of investment to go for. Rather than a simple output, we are faced with a series of events unfolding, which are nuanced in outcome, not black and white.
On the upside, those hoping for a softer Brexit might be in with a better chance, although whether that is feasible and allowable at a palatable price from the European Union is another matter. It also means a number of harsher Tory policies might not make it to the debating floor, like social care and triple lock pension reform, but one thing has become more certain and that is the state of Union with Scotland will persist for a bit longer unchallenged.
Landlord taxes
It is unlikely there will be appetite for revoking any of the landlord tax reforms introduced by George Osborne or that there will be a relaxing of the intention to abolish policies like banning letting agents fees. The tougher tax treatment is hitting the higher-leveraged landlord worst. Bigger portfolio landlords may have switched new purchases to the limited company structure to ensure it is more tax efficient and will benefit if the Conservatives reduce Corporation Tax to 17% by 2020 as promised.
Property Investors are likely to enjoy continued low mortgage interest rates for a few more years to come, as well.
Rather than just accepting a muddle-through, what can investors do?
Well there are options beyond buy-to-let if you want to spread your risk. One which offers attractive yields and isn’t exposed to currency fluctuations could be an option.
Or an investment which is high yielding and countercyclical to the standard expected economic cycle
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Tags: European property, investment property, landlords, Risk & Reward, Safe-haven