The B word has been somewhat overshadowed by the C word. So we forgive you for being out of the loop since our EU departure. Despite other events, Brexit has happened and it continues to shape our professional, economical and political backdrop. Here’s the latest news you may have missed but it’s delivered heavily caveated, as it’s extremely hard to separate the impact of the pandemic from the effects of Brexit.
The mass exodus didn’t happen
The think-tank New Financial has been tracking the impact of Brexit on the banking and finance industry in the UK over the past few years. Its pre-departure analysis has given the organisation a good baseline from which to ascertain an accurate impact assessment. Speaking to the Evening Standard, William Wright at New Financial revealed its research found only three firms had quit the UK altogether. Instead, more than 440 companies in the UK’s banking and finance industry chose to partly relocate, actually creating a more fluid movement of professionals.
Job losses in finance were woefully overestimated
The Telegraph recently carried the headline ‘City jobs exodus to the Continent is more a ripple than a wave’ – illustrating that the overhyped pre-Brexit forecasts simply haven’t materialized. In fact, consultancy firm EY reported that ‘so far, just over 7,500 jobs in the financial services sector have been lost to Brexit, compared to 2016 estimates of around 80,000 potential job losses.’ The UK’s new ability to flex and adapt outside of the EU is said to actually make it more attractive to businesses and skilled, high-paid executives.
Inbound migration is taking place
As we reported in a previous blog, a Freedom of Information request by financial consultancy Bovill found approximately 1,500 money managers, payment firms and insurers applied for permission to continue operating in the UK after Brexit, with 1,000 of those opening offices in the UK for the first time.
This sentiment dovetails with comments from Wright, who says many EU firms are likely to open a new office in the UK, with a likely outcome of around 300 to 500 ‘mainly smaller firms’ potentially opening an office on our shores.
International property investors home in on the UK
An appetite for UK property is always a good indicator of the country’s wider prospects and even post Brexit, there is no sign of a slowing in interest. A recent survey by DLA Piper set out to establish the intentions of individual global property investors during 2021. One-third of the 500 high-net-worth investors who took part in the European Real Estate Global study revealed their residential real estate activity would focus on the UK, with Chinese and American investors most likely to purchase UK property this year.
Adding further weight to the pro-UK argument is the Emerging Trends in Real Estate report, published by PricewaterhouseCoopers and the Urban Land Institute. It highlights how the UK – and London in particular – has not fallen out of fashion with global property investors. The report named London as the second-best place for property investment in Europe, while a separate study by Pure Property Finance found that London, Manchester and Liverpool were favoured by foreign companies investing in UK property.
So why are those on the international investment stage sticking with the UK? Survey respondents cited ‘the continued appeal of UK real estate post-Brexit’– rooted in its ‘trusted asset status, strong fundamentals, low interest rates and high potential yield returns compared to equity markets’ as encouraging core reasons.
Setting our own business agenda
One leading light on the business stage wants to add ‘innovation’ to the above list of the UK’s post-Brexit assets. In an interview with City AM, the managing director of private equity firm YFM – who is also chairman of City-based industry group VCTA – cites an exciting future ahead.
David Hall comments that there is a new opportunity to alter the investment regulation for the better, open up new and efficient ways of trading with non-EU markets, such as the US and Singapore, accelerate the growth of small businesses and create innovative talent clusters across the nation for inward gain.
Hall’s conclusion is nothing short of positive: “Despite Brexit, overseas investors still know that the UK is producing some of the most innovative companies in the world and we are still seeing high demand from overseas investors. In fact, some European investors will consider having a post-Brexit UK footprint more important than ever.”
If you are considering relocating to the UK, get in touch with us today to see how we can support you.