A bleary-eyed Theresa May emerged on Friday 8 December to announce that a deal with the European Commission had been reached and the hard work could begin. The pound surged confidently upwards to a six-month high, signalling the market was satisfied with the news. But where does this leave the housebuilding industry?
The housebuilding industry is especially vulnerable to economic sentiment; uncertainty is one of its biggest threats. Now, at least, we know a few facts.
The hard-won deal states that there will be no hard border between Northern Ireland and the Republic of Ireland, EU citizens living in the UK and UK citizens in the EU will have their rights guaranteed, and the UK has agreed to settle its financial commitment with the EU over a number of years.
The change in mood is palpable, according to some estate agents. “We at Quintessentially Estates have seen the biggest reading in the last few weeks for 2017 showing that people are feeling positive about the outcome of Brexit,” said Penny Mosgrove, CEO of Quintessentially Estates. “A lot of our buyers in the last year have put off purchases and decided to stay in rented accommodation due to the uncertainty of their position in the UK.
“This news will give them the certainty needed going into 2018 and will help re-open the purchasing conversations. Property aside, what fantastic news to receive just before Christmas, that the UK government have come to such a positive agreement. We hope this positivity continues into 2018.”
However, the National Federation of Builders (NFB) has warned that the hardest part is still to come. The industry body has warned the government to focus on achieving a final withdrawal agreement that addresses the main demands of the Construction Industry Brexit Manifesto.
Richard Beresford, chief executive of the NFB, said, “The worst enemy of businesses, especially SMEs, is uncertainty. We welcome the positive developments in the Brexit negotiations with the ambition to secure a good Brexit deal for construction SMEs, in line with the priorities set out in the Construction Industry Brexit Manifesto.”
There is, indeed, a long way to go. Theresa May has warned that “nothing is agreed until everything is agreed.” The rights of EU citizens in the UK has been guaranteed as part of the deal; however, the future of free movement and trade remains on the table. A recent study revealed the reliance of the UK construction industry on foreign labour.
The Royal Institute of British Architects (RIBA) has warned of the economic consequences of a bad or no deal Brexit for the architecture sector.
New research has shown that the UK’s architecture sector is particularly exposed to changes on the global stage because of its position as an exporter and its reliance on international talent. However, this means that there could also be new opportunities if UK Government takes the right approach to retaining and attracting skilled architects and strikes key trade deals.
The research revealed that architecture contributes £4.8 billion to the UK economy every year – in a ‘No Deal’ scenario architectural service exports to the EU alone will collapse by 29%. The total impact of lost export earnings from around the world could be £73 million a year.
RIBA President Ben Derbyshire, said, “A no deal Brexit is not an option; it would be a disaster for UK architecture and our built environment, and the government must take this option off the table.
“This means remaining open to the best and brightest talent from around the world and a new trade relationship with the EU and the rest of the world. Anything less will lead to a skills exodus, higher costs across the industry and the failure to deliver domestic policies on housing, infrastructure and the industrial strategy all of which rely on our being open for business to international design talent.”
PHOTO CREDIT: Ilovetheeu