Failure to reach a deal with EU could hurt investment, experts say
A ‘NO-deal’ Brexit could destabilise investment in the Scottish property market, drive up inflation and subsequently lead to closures in the trade, commercial property firms have warned.
With less than six months to go until the UK officially leaves the European Union (March 29, 2019), and continued political deadlock surrounding the UK’s exit, commercial property firms told SLTN that the UK Government must focus on securing a deal which protects the economy post-Brexit.
Barry McNeil, a director of Cornerstone Business Agents, told SLTN: “My own feeling is that a no-deal Brexit, coupled with a lack of strong leadership in a weakened government, will cause uncertainty with worldwide investors, hotel companies and private equity investing in the UK.
“They will sense paralysis and uncertainty and this will only abate if a meaningful alternative or consensus is reached quickly.”
A failure to reach a deal with the EU could also push inflation up, warned Peter Seymour of Graham & Sibbald, who told SLTN that if it was to cause any spike in the cost of goods coming from the EU to the UK, this could “hurt operators who are already being squeezed with increased wage costs, pension costs and business rates”.
“It could cause weaker businesses to fail,” he said.
Alan Goldie of The Restaurant Agency warned that in the event of a no-deal departure, the main concern would be potential interest rate rises. However, Goldie added that, regardless of a deal or no-deal Brexit, the confirmation of the UK’s future relationship with the EU alone “will release the market again as buyers and sellers realise that business goes on regardless of political differences”.
Similarly, Seymour of Graham & Sibbald said the trade “is very good at adapting”, adding that the market is stronger than it was 12 months ago.
Others remain confident that a deal will be secured.
McNeil of Cornerstone Business Agents said: “I do suspect there is still posturing on both sides and a consensus will be reached with our European neighbours.
“They need to deal with the UK just as much as we need to deal with them.”