As the Brexit endgame approaches, our latest report looks at what happens next, and what the transition to life outside the EU means for UK real estate.
We continue to expect a Canada-style trade deal (including a deal on financial services) to be reached and implemented by the end 2020. COVID-19 has changed the Brexit process and the politics, but it has not changed the destination.
Using the very latest data and two new CBRE surveys to update our analysis, we find that Brexit-related uncertainty is now substantially reduced, and arguably already priced in. Brexit-induced labour shortages look much less of an issue for the UK in the light of COVID-19’s economic effects. However, there will be some residual uncertainty and temporary arrangements continuing in specific sectors into 2021. There is likely to be some short-lived transitional disruption to goods trade, but also longer term opportunities.
Lengthy preparations mean that even a ‘no deal’ outcome would be less damaging than previously thought, but would be challenging in the short term.
Longer term, the success of the UK economy, and therefore UK real estate, depends on the policy actions the UK takes to counteract the more limited access to the EU market which the UK will have.
Other far-reaching structural changes in UK real estate, many (but not all) driven by COVID-19, are now much more important for decision makers to focus on – online retail, the purpose of the office, and other government reforms, to name but a few.