Property mogul, Ofir Eyal Bar has been a power player in the UK market, with a substantial portfolio of investments across the board. One of the most pressing questions he receives at his seminars with budding investors is the following: How will Brexit impact real estate investments? As a self-made millionaire, he has racked up considerable experience with commercial real estate, residential real estate, raw land, and mines. The Brexit saga is particularly poignant, since it has far-reaching implications for the broader UK economy, and the world at large. When Britons voted on June 23, 2016 to leave the European Union, scant attention was focused on the deeper implications of a Brexit on real estate investments. As a case in point, consider the GBP/USD exchange rate prior to Brexit, and the current exchange rate.

• June 23, 2016 – 1 GBP was the equivalent of 1.4883 USD
• August 6, 2019 – 1 GBP is the equivalent of 1.21805 USD

Barring asset appreciation, inflation, or other factors, the nominal value of a £1 million property on June 23, 2016 was the equivalent of $1,488,300. Fast forward three years, that same £1 million property is worth $1,218,050 on August 6, 2019. That is a net decline of $270,250, or 18.16%. This rudimentary example serves to highlight the impact of speculative sentiment on property prices, given an imminent Brexit. Of course, the Brexit hasn’t occurred yet. Prime Minister Boris Johnson is expecting Britain’s divorce from the European Union to take place by October 31, 2019. What happens on November 1, 2019 is anyone’s guess.

Why Is Brexit Associated with Massive Uncertainty?

For starters, a divorce agreement between the United Kingdom and the European Union is unprecedented. The region is built on deep commercial, political, ideological, cultural, and social bonds, many of which will be tested with a Brexit. The shock factor alone is enough to send markets into a tailspin, and the pound may not be able to sustain crashing negative sentiment. The global economy reacts strongly to what happens in the EU and the UK.

Many of the world’s most valuable courses are based there, including the FTSE 100 index, the FTSE 250 index, the CAC 40, the DAX 30, among others. Given that the global economy is a synergistic, integrated sum of its parts, a shock wave that initiates in Europe and the United Kingdom will spread far and wide. As a result, we can expect the monetary authorities (the Bank of England and the European Central Bank) to maintain a prolonged period of low interest rates to support the economic shocks that follow.

Naturally, a slow pace of economic growth will have a devastating impact on commercial real estate. This is particularly true of the retail sector, and office buildings, both industrial and commercial. Since nobody knows what the precise details of a Brexit will be – Hard Brexit or Soft Brexit – the impact of the divorce settlement could range from severe to moderate, but it will impact property prices nonetheless. As a result, the uncertainty in Europe and the UK could send a deluge of funds to the US and other markets.

This capital flight from UK and EU investors could serve to undermine the value of properties in the UK and the EU, and boost demand and prices for US-based properties. As property prices in the United States rise, so the cap rates will fall. Unfortunately, the Brexit saga belies a much deeper crisis which has been brewing in the EU for many years. That being anemic growth, high levels of unemployment, and an atmosphere that can best be described as low confidence. The global financial crisis threw Europe for a loop, and it has not recovered in the years since.  The Brexit may be the final nail in the coffin.

Cross currency exchange rates will be impacted by Brexit-related phenomena. Property markets in other parts of the world will react accordingly. For example, destinations outside of Europe such as Israel, South Africa, the United States, Australia, and New Zealand may be seen as viable alternatives. As money exits the EU and the UK at an accelerated pace, it will also serve to devalue the purchasing power of the euro and the pound. As traders and investors sell EUR and GBP, they will be buying alternative currencies like USD and JPY.

This also impacts economic growth prospects which directly spill over into the real estate market. If the purchasing power of the GBP gets eroded too much, people in the UK will struggle to make purchases. This may cause the housing market to contract, curtailing the construction of new properties and boosting demand for rental properties. Real estate tends to act in accordance with what’s available, with excess supply leading to lower prices, and reduced supply leading to higher prices. Either way, the rental market looks likely to benefit from a depreciating pound and a reduced number of housing starts.

Prognostications for the Real Estate Market

The most damaging effects of a Brexit will be felt in the City of London which has heretofore been known as the biggest concentration of financial and banking corporations outside of the United States. The London Metropolis has served many European nations as the epicentre of European trade. No other city in Europe has been able to compete with London for decades. Markets could suffer losses of 25% – 30%, with a fractious relationship between the UK and the EU. The absence of trade agreements, and a common market, customs free, duty free, and tariff free activity could prove damaging to London’s economic prosperity.

Rental prices will plummet, vacancies will increase, and closures of real estate will be the norm. This will continue unabated until such time as the UK and the EU can patch up their differences and come to equitable agreements. Nonetheless, the City of London has widespread appeal that transcends beyond Brexit-related matters. One area of growth will be UK warehouses in and around the City of London. This is particularly true with a Hard Brexit. Storage facilities will be needed, for speculative purposes. Unfortunately, no one knows precisely what the long-term prognosis of the real estate market will be, given the multifaceted intricacies we are dealing with.

One thing is likely: a Brexit is a guarantee of uncertainty. When people are scared about what’s going to happen, they are generally reluctant to spend money on big-ticket purchases. Real estate will suffer as a result. In January 2019, UK house price growth ticked over at its slowest pace in approximately 6 years, at just 0.1%. Expectations remain largely bearish, given the fears that a Brexit strikes into the hearts of investors.

Most people are playing a waiting game, hoping for the best, but planning for the worst. Since the Brexit referendum in 2016, UK home sales have effectively plateaued out, and the steady growth between 2009 and 2016 is over. As interest rates tick lower, banks will attempt to entice new homeowners into the market. Of course, Prime Minister Boris Johnson may just surprise everyone and wrench the UK out of the fire. Sage advice at this stage is to wait it out before investing in real estate at home, or abroad.

Though the wage gap between genders is wide around the world, even the UK doesn’t rank the best among entrepreneurs and their pay. Only one-third of businesspeople in the country are women, and their businesses are 44 percent of the size that mens are. Looking towards a post-Brexit country, the government is looking for ways to not only make a moral judgement that women should be included more in entrepreneurship, but that they will use it to expand the economy.

The Disparity and & the Economy

A new report from the Rose Review of Female Entrepreneurship said that closing the gender disparity could generate up to £250 billion in the economy. The Rose Review, which is an independent commission of the UK Treasury, claimed that men are five times more likely to turn around a £1,000,000 because there are many barriers to their success. According to MoneyPug, the website used to find personal loans, it is the goal of the government to increase the number of female entrepreneurs by 50 percent in the year 2030 and facilitate their ability to get investments.

The “Investments in Female Entrepreneurs” Code

With UK Finance, the Treasury of the country is creating a new code for lenders to follow. It is called “Investing in Female Entrepreneurship.” Published annually, the code will focus on the habits of financially institutions and investment lending. Partly led by Alison Rose, a banker from NatWest, the eight-point initiative provides resources and financing to both women looking to get started in business and women who wish to expand their company.

Barriers Women Face

The review found that five pivotal barriers exist that result in the lower entrepreneurship rates among women. First is the low access to capital. There is also less awareness of capital and a greater awareness or risks. Misperceptions of experience and lack of skill harm women’s chances for investment, disproportionate responsibilities at home make it harder for women who want to get into business, and all of this leads to a smaller number of mentors and role models. The government aims to mitigate these obstructions using a plan of eight initiatives that target different stages of becoming an entrepreneur.

Eight Initiatives

Beginning with promoting greater transparency in the allocation of funds. To do so, they will introduce the new code that commands financial institutions to the principles of gender equality. It also calls for transparent reports of funding. Another initiative is to launch new methods of investment in order increase funds to women in business. Lenders will be encourage to invest in female-led companies.

Both institutional and private investors will be called to fund women entrepreneurs. Banking products will be reviewed and a new system to help entrepreneurs who have family responsibilities. Two initiatives focus on improving access to mentorship, expertise, and networking opportunities. Finally, the institutions and organisations that offer educational services will accelerate their development and a new public platform will be created to help provide information to all entrepreneurs.

How this Will Affect the Economy

Currently 6 percent of British women run their own business. This is compared to nine percent in Australia and 11 percent in the US. All are low, but the UK’s is the smallest of the three. The gap at present represents over a million “missing businesses.” This accounts for a significant percentage of the British economy overall, without these companies the UK isn’t as competitive or as strong as it could be. But only time will tell if the government will be able to cultivate that much growth, the equivalent of £250 billion, in added gross value to the economy.

The Right Thing, the Smart Thing

Now that the disparity between male and female business leaders is clear, it is also apparent that the government is going to try to lessen the gap and help female entrepreneurs. With support, guidance, and mentorship, increased numbers of women in business will lead to better products, lower prices, and a stronger economy. Some may be skeptical that the right person will get the loan every time with gender equality measure, but if the rate of female entrepreneurs stays low the economy will not be at its full potential and we won’t be doing the moral thing. Doing the right thing is the smart thing, and increasing women’s role in business is both.

When you think about your digital marketing strategy, you may be advertising your products by using influencer marketing, aka. working alongside an online personality/celebrity. Yes, these sorts of influencers do have a large following that they can expose to your sponsored content. But their influence stretches far further than that. Here are some things that you should be thinking about when you work alongside an influencer for your advertising.

What is influencer marketing?

Well, influencer marketing is normally advertising through a famous personality, aka. either a celebrity or someone who has a large social following on the web. By recruiting a celebrity personality, you can reach a bigger audience and actually increase your sales, especially if you have chosen to work with someone within your own “niche”. For instance, if you are a fabric company and you have gone to a marketing agency, such as influencer marketing agency Socially Powerful, then they might recommend that you work alongside an online celebrity dressmaker on Instagram to make sure that they can show off your products. Your influencers can work on any number of social platforms. As long as they have a large audience then this can help boost your sales.

Increasing your authority

One of the best things about influencer marker is the fact that the influencers can actually increase your authority and SERP online. The more that your influencers talk about you, and potentially link back to your website, the more likely that you are going to get a boost in traffic. They have come to your page because they see you as a good brand and want to buy your products for yourself so that they can try them out. If you are looking for this SEO boost then influencer marketing is the perfect way to get started.

Gifting

If you want to get away from the idea of sponsored content , but still want to be able to show off your products to a wider audience, the best way to do it is through gifting. By arranging a deal with the social media star, you can send them free products that they can review on their own website or social media pages. If you get a good review of them, you are more likely that you will get more traffic. People tend to remember branded content twice as long as a traditional advertisement. That’s why it is so good to work with a social media star. Not only can they show off your brand but they can put their own personal stamp of approval on it.

Advice and experience

Social media celebrities are the sort of people who have managed to build up their own reputation from nothing. That’s why it’s worth listening to them in relation to their experience on the market.  They know exactly what works and what is practically used by social marketing strategists all over the globe. If you want your product to sell well, make sure to listen to their advice and recommendations. They will only improve your company’s product visibility.