Lifestyle Index: Brexit

There's no denying that trends in the currency market have been strong enough to influence lifestyle trends these days.

But more than inspiring new looks and styles, financial market fluctuations have led to big bargains that you can't afford to pass up. Keep calm and shop on, people!

 

Designer Items

London is home to well-known luxury name brands such as Alexander McQueen, Paul Smith, Vivienne Westwood, Burberry, and Hackett. These sophisticated British brands have held on to their signature high-quality design and rich history for decades yet prices of these goods imported to North America or Asia are cheaper than usual these days.

Perhaps the main reason for these bargains is the sharp fall in the British pound ever since the idea of a Brexit popped up. The decision to open the vote up to a nationwide referendum has yielded a "Leave" vote, setting the stage for more uncertainties in the UK economy and potentially losing access to the single European market. To top it off, European officials have bitterly pledged to make the breakup process more difficult for the UK, which not only means more pound depreciation but a potential influx of British brands in other markets.

Simply put, a depreciating local currency makes that country's or economy's products cheaper in international markets. A Burberry trench coat that costs £2,000 was worth nearly $3,000 during the pre-referendum days at a GBPUSD exchange rate of 1.4500 but is now worth less than $2,500 at current rates. Alexander McQueen sneakers at £400 were worth $580 before June this year and now cost only $500 at the current GBPUSD rate of 1.2400. 

With that, goods made in the UK and exported to other nations whose currencies are faring relatively well are effectively being sold at discounts. If luxury items aren't your style and you favour other High Street brands such as River Island, Dorothy Perkins, Miss Selfridge, or Topshop, your wallet would be happy to know that British-brand clothes are selling cheaper in terms of other local currencies these days. Hunter boots, anyone?

 

European cars

Ah, Europeans and their fancy cars! If you want to up the ante and really take advantage of the steep drop in the pound's value these days, look no further than these luxury British cars. Fancy a Bentley or a Rolls Royce? Now might be the best time more than any other to take advantage of the lower value of the pound, especially against the US dollar, Canadian dollar, Australian dollar, and New Zealand dollar.

The euro has also had its fair share of pain in the aftermath of the EU referendum in June this year. After all, a decision by the United Kingdom to leave the bloc would mean that the EU would lose one of its biggest trade partners, which means that the market for its goods would be considerably smaller. This could mean that they might be more willing to offer irresistible bargains to other nations that could make up for the lost UK market share.

Need a refresher on which car brands you might want to start off with? There's the big four of BMW, Audi, Mercedes-Benz, and Volkswagen, which have been trying to restore their image and market demand in the wake of the recent emissions scandal. Italy has Ferrari, Alfa Romeo, and Maserati. 

 

Real Estate

If investing in property is more your cup of tea, then you should know that the whole Brexit issue has caused real estate prices to tank in London and in most British cities. For one, many are worried that people from other EU member nations might lose their jobs or health benefits while residing in the UK, thereby deciding to up and leave before things get any worse.

In line with this, property speculators also became concerned that multinational companies might abandon their London offices and establish their headquarters elsewhere in the European Union to avoid potential instability. Leases on offices and residential units have seen weaker demand in the past few months, causing owners to lower their rental fees as well. 

On the flip side, the cheaper value of the pound has led to an influx of tourists who are taking advantage of these cheap accommodations and lower airfares. This has allowed a good number of property rentals to stay afloat in seemingly tough times, indicating that there is hope yet in terms of real estate investment. Some are even taking advantage of the recent slump in prices to invest at what might be a market bottom.

A word of warning, though. It may be too early to say that UK property prices have bottomed out since a lot still hinges on the outcome of negotiations with the EU. A hard Brexit, which might involve losing access to the single market and giving up a number of other advantages that the UK enjoyed in staying with the bloc, could result in another wave lower for the UK real estate sector. Arguments for a soft Brexit, on the other hand, could relieve most of the concerns in the UK economy and allow property prices to make a strong rebound.

In comparison to the overheating property market in other countries such as Australia, New Zealand or China, the UK real estate sector does offer plenty of upside potential when it comes to prices and demand, although there is still a considerable amount of risk involved at this point. 

 

What's next?

Moving forward, British goods exported to other nations could be sold at bargain levels for as long as the pound continues to depreciate. On the home front, Londoners are starting to feel the pain of a weaker domestic currency in terms of everyday goods such as cheese, chocolates, or good ol' Marmite. Further down the road, the UK could open up trade of its products to other nations in order to make up for possibly losing shoppers from the European continent.

 

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