Article 50 deadline set: Industry responds

Article 50 deadline set: Industry responds




Prime Minister Theresa May has announced the deadline for the UK to trigger Article 50 of the Lisbon Treaty and begin the process of leaving the European Union.

Speaking at the Conservative Party Conference 2016 in Birmingham on 2nd October, Mrs May told party members that Article 50 will be invoked before the end of March 2017.

“Having voted to leave, I know that the public will soon expect to see on the horizon the point at which Britain does formally leave the European Union,” Mrs May admitted.

“So let me be absolutely clear: there will be no unnecessary delays in invoking Article 50.

“We will invoke it when we are ready and we will be ready soon.

“We will invoke Article 50 no later than the end of March next year.”

Mrs May claimed that the decision to delay the leaving process until next year had helped Britain’s economy to stabilise in the wake of the referendum.

She cited consistent levels of consumer confidence, continued foreign investment into Britain and high levels of employment as evidence of the plan’s success.

“That decision means we have the time to develop our negotiating strategy and avoid setting the clock ticking until our objectives are clear and agreed,” Mrs May insisted.

“And it has also meant that we have given some certainty to businesses and investors.

“There is still some uncertainty, but the sky has not fallen in as some predicted it would – our economy remains strong.”

Despite the prime minister’s confidence, some bridging lenders have warned that some uncertainty remains over the conditions of Britain’s exit from the EU.

Bob Sturges, head of PR and communications at Fortwell Capital, told Bridging & Commercial that businesses may be concerned as to whether Britain will achieve a ‘hard’, ‘soft’ or ‘clean’ Brexit.

“As a result, there will be a period of uncertainty likely to impact short-term UK economic performance.

“The housing sector will not be immune.”

Bob suggested that while lenders with proprietary lines are more likely to be confident than those with external investor funding, both groups may benefit from larger banks becoming more cautious.

“They [big banks] won't stop lending altogether; but, as we saw in the immediate post-2008 period, they will cherry-pick their clients to minimise risk and to protect their capital buffers.”

Meanwhile, Jonathan Sealey, CEO of Hope Capital, stated that uncertainty over the terms of Britain’s departure may reduce demand for bridging in some areas.

“Bridging is likely to be most affected in the capital; London has already seen a waning of interest, although that was already happening before the referendum.

“The biggest risk to bridging is consumer uncertainty; if there is uncertainty about property prices then developers are less likely to invest and consumers are less likely to move home.

“There will inevitably be more doubt over the next two or three years until we know what the future looks like, but the sooner we start working towards this the better.”

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