Brexit

Specialist finance industry reacts to Brexit white paper



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On 12th July, the government published its white paper proposal explaining how the UK's future relationship with the European Union would work.

In the white paper, Theresa May stated: “In short, the proposal set out in this white paper would honour the result of the referendum. 

“It would deliver a principled and practical Brexit that is in our national interest, and the UK’s and the EU’s mutual interest.”

The white paper addresses the government’s plans for trade, freedom of movement and agricultural policy with the EU post-Brexit. 

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Has the white paper boosted confidence within the industry?

Stuart Hulme, marketing director at Hampshire Trust Bank, said it welcomed the publication of the white paper.

“Business has faced an uncertain couple of years, so more clarity, on what our relationship with the EU in the future will look like, is to be welcomed.” 

John Davies, director at Just Cash Flow PLC, stated: “Nobody knows where Brexit is going to land, but the priority must be removing the uncertainty and giving SMEs the confidence they need to invest in and grow their businesses.”

Chris Oatway at LDNfinance, added: “The publication of the white paper for the first time defines HM Government’s position with regards to the future relationship that the UK seeks with the EU. 

“While, clearly, political challenges still exist, the policy paper sets a direction of travel which will help to build confidence.”

However, in the run-up to the publication of the white paper, the resignation of both the foreign secretary and the Brexit secretary was announced. 

“Given the number of dissenters in the Conservative party and the unwillingness of the Labour party to engage meaningfully in the Brexit process, the situation is as clear as mud,” alleged Benson Hersch, CEO at the Association of Short Term Lenders. 

“Uncertainty prevails, and this is not inspiring confidence.”

Michael Dean, principal at Avamore Capital, agreed adding: “There was so much resistance from both remain and leave camps that from the point of view of the business community, nothing has really changed. 

“If anything, the position is worse because we seem to have a government which appears to be falling apart.”

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How might the white paper impact property finance?

“I think the issue for us is the current uncertainty that surrounds everything,” said Arwel Griffiths, senior partner at Robert Sterling Surveyors. 

“So as not to get things wrong, valuers are cautious. 

“This caution means lower valuations than might [be the case] because of a caution barrier being factored in. 

“That can’t be good for overall property market confidence.”

Benson added: “As far as lenders are concerned, nothing much has changed.  

“Some lenders may be more cautious, but the amount of money available in the sector will continue to drive competition.”

Meanwhile, Keith Aldridge, managing director at Amicus Property Finance, said: “What’s important is to avoid destabilising speculation and embrace the fact that the UK housing market has and continues to experience strong demand for all forms of short-term lending: refurb, conversion as well as for ground-up.”

Paul Riddell, head of marketing and communications at Lendy, felt that the UK property-lending market had proved itself to be very robust and adaptable in the face of wider political and economic issues.

“At present, there is a growth in demand from both lenders and borrowers in conjunction with more competitive pricing within the P2P market, so our expectation is that business will continue as usual.”

Ludo Mackenzie, head of commercial property at Octopus Property, added: “To date, the property and finance markets have in general proved extremely resilient to Brexit concerns and – if what we are seeing from a business perspective is anything to go by – will continue to be so until the terms of the UK’s exit become clearer.”

Meanwhile, Colin Sanders, CEO at Tuscan Capital, saw opportunities arising from the uncertainty of Brexit.

“With institutional lenders distracted, brokers are likely to become even more proactive in seeking out alternative sources of debt for their clients. 

“With secure and competitive funding underpinning much of the UK bridging sector, I anticipate continuing – and perhaps even rising – demand for our products and services.”

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