Propelling Post-Brexit Success: How Proptech can Boost Property Management
When was Brexit? It has been nearly four years since the UK officially left the European Union following the Brexit vote, and what an eventful four years it has been! During this period, the country has experienced a considerable amount of political and economic uncertainty, further complicated by the COVID-19 pandemic. As the effects of Brexit continue to unfold, there have been numerous speculations and myths surrounding its impact on the UK property market. In this blog, we will delve into the facts and debunk some of the misconceptions.
Is the UK still part of Europe after Brexit?
Geographically, The United Kingdom is still located in Europe. Brexit couldn't take away that impressive feat, at least. However, politically and economically, the UK is no longer part of the European Union, making it an independent nation with its own laws, regulations and trade agreements. We could provide ten reasons for Brexit, but we have chosen to adopt a more refined approach. Our endeavour is to furnish a list of myths pertaining to the property market that have emerged in the aftermath of Brexit.
The Falling of the Pound and its Effects on the Property Market
One of the immediate effects of Brexit was the decline in the value of the British Pound, significantly impacting the UK pound rate. As a result, overseas holidays became more expensive for the average UK citizen, and the cost of importing goods into the country increased, potentially leading to a higher cost of living for the average person. it was initially believed that the decline would significantly impact property prices and housing affordability.
However, the actual impact has been less pronounced than anticipated. UK-based buyers would feel this pinch due to the cost of living crisis and rising energy prices, but for overseas investors, the falling pound only provided an added incentive to invest. The presence of vacant London properties scattered throughout the city and the subsequent surge in demand for affordable housing can be perceived as drawbacks. However, on the flip side, there are also positives that can be derived from this situation, particularly in the form of property taxes associated with investing in UK property.
However, other factors seemed to outweigh the effects of the currency devaluation.
Impact on Export and Trade Agreements
With a weaker pound, export businesses have found some advantages as UK products become more competitively priced in foreign markets. However, this advantage is dependent on trade agreements and tariffs that come into play post-Brexit. Uncertainty surrounding trade agreements has been a significant concern.
Without favourable trade deals, the advantages of a weaker pound for export businesses might be offset by additional taxes and barriers, leading to further uncertainty in the property market.
The Housing Market and Price Impact
The extreme demand for properties in the UK has shown signs of slowing down after Brexit, affecting real estate jobs as well. The uncertainty surrounding the economic landscape and the property market has led to a more cautious approach amongst buyers and investors. In contrast to May 2022, where only 23% of property transactions were completed below the original asking price, recent reports indicate that an impressive 79% of property transactions have been finalised below the initial asking price.
Whilst there were fears that Brexit would lead to a housing market crash, the impact has been less severe. Property prices have experienced fluctuations, especially amidst the pandemic which completely reshaped its dynamics. Many individuals who have over-leveraged on houses are now facing the consequences as property prices have dropped.
The impact of Brexit on the UK property market has been a subject of debate and speculation. Whilst the falling pound did create opportunities for overseas investors, the overall effects on property prices and demand have been more nuanced than initially predicted. Economic uncertainty and trade agreements have been critical factors influencing the property market’s trajectory. Separating the facts from the myths to make informed decisions has proven complicated in the ever-changing landscape of the UK property market post-Brexit.
As the UK navigates the aftermath of Brexit, technology has been rapidly advancing, and the emergence of proptech offers innovative solutions to mitigate some of the negative effects of Brexit on the real estate industry.
Streamlining Transactions and Processes
“Brexit has been the biggest-ever imposition of bureaucracy on business”
According to Sitreright, a manufacturing firm based in Dorset.
A significant challenge has been the uncertainty surrounding property property transactions. Proptech platforms, specialising in high-tech property services, are revolutionising the ways in which people buy and sell property. Digital efficient solutions such as online property marketplaces, virtual property tours, and digital document management systems streamline the entire process, reducing paperwork and saving time for everyone involved. Although not a direct solution, this increased efficiency can help maintain investor confidence and encourage continued interest in the UK property market.
Increasing Global Access to the UK Property Market
Brexit has raised concerns in the past about the ease of international investments in the UK property market. Proptech platforms have the potential to cater to overseas buyers and bridge this gap. The proptech market size is expected to grow exponentially over the next decade, from $18.2 billion in 2022 to an estimated $86.5 billion in 2032. Automation, streamlined business processes, and data-driven decision-making significantly contribute to reducing costs, ultimately enhancing global access to the UK property market and making it more appealing to all stakeholders.
Supporting Property Management and Compliance
Brexit has brought about changes in regulations and compliance requirements. Proptech startups are at the forefront of providing innovative solutions to assist landlords and property managers in staying compliant with the evolving legal landscape. These proptech platforms offer automated tools and centralised systems that streamline various property management tasks such as:
Rental Management
Tenant Communication
Property Maintenance
Rent Collection
Financial Reporting
In the conclusion, while the UK property market has experienced a blend of positive and negative outcomes since Brexit's departure in 2019, there remains a prevailing sense of Brexit regret. The falling pound initially raised concerns, but it also made UK property more affordable and attractive for overseas investors, despite uncertainties surrounding trade agreements.
The housing market experienced fluctuations, and while some feared a crash, the impact was less severe. Proptech has emerged as a powerful tool to navigate the post-Brexit real estate landscape, streamlining transactions, increasing global access, and supporting property management and compliance.
Amidst the ongoing challenges posed by Brexit and the COVID-19 pandemic, the property market has shown resilience. Buyers, sellers, and investors are having to stay informed and embrace technological advancements to make well-informed decisions in this ever-changing landscape. As the UK continues to navigate through these unprecedented times, embracing innovation and staying adaptable will be key in ensuring a robust and sustainable property market for the future.
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