Brexit ‘need not damage UK property finance’

Ahead of the annual mid-March MIPIM conference in Cannes, City lawyer Walton said there are three key signals that point to a bright future for UK real estate. He cited: new legislation on private fund limited partnerships, the government’s Housing White Paper and the primacy of English law.

Private Fund Limited Partnerships (PFLPs)

In April 2017, new legislation will come into force which aims to reduce the administrative and financial burdens on funds set up as limited partnerships.

The legislation removes the requirement for limited partners to contribute capital to a PFLP; reduces liability for debts; exempts partners from the current duty to render accounts and information between partners and from the restriction on competing with the partnership; and introduces a list of actions which limited partners may take without falling foul of being deemed to be taking part in the management of the PFLP.

“This mirrors the steps taken in jurisdictions such as Luxembourg and the Channel Islands and should make the UK a more attractive domicile for these funds,” said Walton.

The UK Government’s Housing White Paper

The recent White Paper included the government’s consultation on support for Build to Rent (BTR) developments. The government’s signalling of support and express acknowledgement of this growth area is to be welcomed, said Walton.

“BTR (the Private Rented Sector) has been gaining traction in the last year or so; representing as they do very attractive yield-led propositions for investors and involving a variety of models, some of which are similar to student accommodation investments which have become popular and stable investments in recent times.”

The primacy of English law

The English legal system is the backbone of many financial transactions across the world and there is no reason for Brexit to change this, said Walton.

“Our commercial courts have assisted in crafting a sophisticated body of law that provides certainty and stability to the financial markets.”

Walton added: “These three factors set within the context of a growing UK economy bode well for the future of real estate and should give the sector confidence as the government navigates its way through Brexit.”