The impact of Brexit on the property market and the agricultural sector10/05/21
In our view, Brexit does not appear to have impacted the property market. In fact, at Forge we have seen an increased demand for property, resulting in a large number of transactions and property surveys and valuations. This may be as a result of the Stamp Duty holiday, which has been extended to the 30 June 2021. The one constant we do know about the property market is that people will always need to move. Changes in personal circumstances, such as getting married, having a new baby or simply needing more space as children grow up, are always going to be reasons to buy (and sell) property.
The Brexit agreement did not cover financial services, which has made for a bumpy start to 2021. From a mortgage perspective it is disappointing, as the European Mortgage Credit Directive was a framework of conduct rules for mortgage firms across the EU and these were fully implemented in the UK in 2016. The lack of clarity means some banks in both the UK and Europe have taken the decision to no longer lend to Europeans buying in the UK or British residents buying in Europe. Others have taken independent advice to establish the parameters in which they can still lend and are still active.
What’s happening with interest rates post-Brexit?
Interest rates have remained incredibly low, despite any nominal rises, indicating the banks do not seem to be overly nervous about the future.
Brexit and agricultural subsidies
As we have discussed before, as part of Brexit, agricultural subsidies are shifting from Common Agricultural Policy to the Agriculture Bill, which has now been passed into law.
The new system will replace the Basic Payment Scheme (BPS), funded under the EU’s Common Agricultural Policy (CAP) – which Defra describes as “inefficient and largely bureaucratic”, skewing payments towards the largest landowners, based on the size of their land rather than rewarding farmers for the work they do.
Direct payments will be phased out over an agricultural transition period, starting with the 2021 BPS year and running until the end of 2027.
This is intended to allow farmers and land managers the time they need to adapt to the new approach and consider which component of the new ELM scheme will work best for their farm.
Farmers and land managers will also be able to apply for alternative support during this time. Productivity grants will be on offer next year and Countryside Stewardship schemes are remaining open to new applications in the first few years of the agricultural transition period, which will help farmers to springboard into the upcoming ELM scheme.
Contact the Forge team to find out how we can assist you with adapting to the post-Brexit world.