Just over a year ago, I wrote a column for this magazine after the general election, outlining the certainties and uncertainties presented by the new government. Although a referendum on the UK’s EU membership topped the latter list, I don’t think I am alone in not having foreseen what we have seen unfold.
A majority of those who voted put their crosses in the ‘leave’ box – that much is clear. But much else is still uncertain.
We still have little idea how that decision will be implemented; what future it implies for the UK and its relationship with the EU and the world; what the timescale and process will be for getting there; or indeed who will be leading us towards it.
In response to this uncertainty, our message to government has been clear. It needs to work with the Bank of England to ensure market confidence is maintained. It needs to show leadership in terms of the many and urgent issues facing the country. It must make sure action is not stalled for a protracted period while we work out what Brexit means in practice. And, of course, it must make sure there is a coherent vision and plan for delivering a strong future for the UK outside the EU.
Our industry stands by its commitment to work in partnership with government, to deliver economic growth, essential infrastructure and great places, and the uncertainty caused by the vote does not change this.
It is important to remember that the fundamentals underpinning the UK real estate market are largely unchanged. It is attractive to investors because of its transparency and liquidity, the stability and fairness of the UK legal system, and of course the global English language.
The fundamental challenges also still remain. We still have a housing shortage, and a huge demand for new homes to be built of all tenures. We still have a critical need to deliver major regeneration projects across the country that will attract investors and unlock development. International students, attracted by our world-class education system, still need accommodation. And our ageing population demands a modern, fit-for-purpose healthcare estate.
The focus on responding to all these issues must remain undiminished. Government must operate ‘business as usual’ – there are regulations to be laid for new bills and consultations to get out before parliamentary recess at the end of July. Government must not shirk decisions on ambitious infrastructure projects – and it should look for ways to stimulate key sectors, such as real estate – for example, by prioritising support for the build-to-rent sector.
I also urge government to make very sure it does not do anything to hamper the sector’s growth. Actions such as ensuring implementation of OECD recommendations to tackle tax avoidance does not have the unintended consequence of making real estate debt more expensive are now all the more important.
The real estate industry is not just a vital contributor to the economy, but also to the social infrastructure that makes our towns and cities places in which we want to live, work and relax. Its potential to deliver solutions must be embraced more than ever.
Melanie Leech is chief executive of British Property Federation
