Post-Brexit Property Market and Life Tenancies

Whether you’re a staunch Remainer or avid Brexiteer, there’s no denying that the UK’s impending EU exit on March 29th, 2019 is causing property market jitters.

Currently, house prices are growing at the slowest rate in almost 6 years. The last time the annual growth rate of house prices was as weak was in December 2012, the UK economy was contracting.


                                            Average UK house prices


Unfortunately, there are no easy answers when it comes to property prices and what happens post Brexit. All we can say definitively is that it is causing market issues. Recent surveys by a number of industry leaders report that almost 40% of all investors and landlords feel that Brexit is their biggest concern in 2019 when to comes to residential investment.

“Buy to Let” landlords are currently selling off their properties at rates not seen since the crash in 2007. But it depends on your perspective and whilst some see this instability as a threat, others may see this as an opportunity to snap up full portfolios or properties which otherwise may not have been available. In our opinion, there is always money to be made from residential investments, particularly with a medium to long-term outlook. In this way, post Brexit could be considered as an opportunity for property investment.

Inevitably however, this uncertainty has led to a drop-in investment levels across traditional types property asset class. Since money always needs to find a home, investors are looking more creatively at other more secure types of investment such as Life Tenancy Investments.

Life Tenancy Properties are typically available for purchase at almost half their RICS vacant possession value. This means that if you purchase one of these investments, you have a “built in” double protection on your money from the day you purchase. This is about as ‘market proof’ as you will get and on top of that there is no debt, rent collection or tenant risks.

For example, if you were to take the average Life Tenancy where the Lifetime owner is 70 years old, we would expect the reversion period to be approximately 15 years. If house prices were to drop by 4% every year for 15 years, your investment would still break even when the property was sold.

Even if house prices were to remain exactly the same from the point you purchased the investment to the moment it reverted, you would have still made 4% compound growth annually on your original investment. And house price predictions post Brexit is a topic that will be on the minds of every property owner in the upcoming Q2 of the calendar year.

Areas such as London and the south of England have seen the slowest rise in property values across the UK where traditionally Life Tenancies are available. However, Wakeley have been working hard to cultivate new relationships with partners in different locations across the UK where prices have greater potential for continued growth. Places such as Devon, Somerset, Hertfordshire and Lincolnshire. Interestingly, we regularly have a large selection of Life Tenancy investment properties available on the Isle of Wight, which last year enjoyed a 16% growth in property values.

So, if you are looking for a safe place to put your money that has built in returns and significant potential for capital growth, you simply can’t go wrong with Life Tenancies.

Make sure you register now to stay up to date with all upcoming and available Life Tenancy investments.