Brexit. The word alone brings uncertainty and fear to some, whereas others are hopeful of the opportunities that leaving the EU may bring. With that being said, no-one can predict what will really happen once the UK leaves the EU. In summary, a ‘hard brexit’ will see the UK cutting all ties with the EU on the leave date, whereas a ‘soft brexit’ will result in the UK still having access to the single market without being a member of the EU. How will each of these scenarios impact UK property tax and the industry? We may not know for sure until the official leave date. However, in this article we attempt to break down some of the possible impact of Brexit on property investors and landlords.
The aftermath of the Brexit vote in 2016 saw the London property market suffering more than any other region in the UK. Falling house prices fell and weak sales combined with Brexit-related uncertainty led to the property market conditions worsening over a short period of time.
However, forecasts by estate agent company Savills predict that the London property market will bounce back after the uncertainty of Brexit settles. Savills estimate that the more expensive house prices in central London will grow by 8 percent in 2020 and subsequently increase by 20 percent between 2018 and 2022.
This provides hope and opportunity for aspiring proprietors and struggling London landlords, however with that being said, it’s important to remember that this is a prediction. Only time will tell how the London property market will fare once the UK leaves the EU.
The property market in the UK has already suffered significantly since the changes last year. Stamp duty surcharges were increased and the wear-and-tear allowance was scrapped, making things more difficult for aspiring landlords as well as current landlords. It’s been said that overall, taxes are set to rise. The Institute for Fiscal Studies has said that the amount of tax paid in the UK is set to reach the highest level in 30 years and could potentially rise even further due to increases in national debt and pressure on public services.
Property investment is not something that should be taken lightly and with the current volatile economic climate, it’s now more important than ever to seek professional advice and ensure that your money is being spent in the right place. Alexander & Co are a Manchester-based accountancy firm with over 40 years of experience in accountancy, tax and consulting services. They support a wide range of businesses and give you the advice you need to help you protect your investments.
Contact Alexander & Co to see how their services could benefit you.
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