As we move into the assessment process for 2019 trainee intakes, firm are always looking for candidates who can display an aptitude for the bigger picture particularly in their key areas of expertise.
While we continually scrutinise the methods of recruitment of trainees and how to bring out the best in people in the assessment centre environment, a great deal rests on the interview.
In view of this, it is important to ensure that you have a few key points up your sleeve to impress the interviewers in an informed and considered way. To make a point but without showing any substance or informed thought behind it is almost worse that not commenting at all.
As always, preparation is central to your success! Here are three real estate trends which would, in my view, pave the way to impress your interviewers…
Brexit
It’s constantly in the news, so it’s a given that you should know the basics about the triggering of Article 50. But what about the potential impact of Brexit on the UK real estate market?
Opinion is divided on whether Brexit is itself a trend-setter or is simply highlighting existing real estate trends. Before you go into your interview, make sure you have done your homework by reviewing not only the legal and financial press, but also the key real estate trade publications so that you have the discussion covered from all angles.
By way of example, post-Brexit, a number of investment banks have indicated that they will be relocating jobs from London to elsewhere in the EU. Whether or not this takes place in practice will depend to some extent on what is ultimately agreed between Britain and the EU in respect of financial passporting rights.
This could lead to the City of London office market being suddenly flooded with available office space. Weaker occupier demand in the market will impact upon the level of rents achievable and subsequently the capital value of this type of asset. Have these issues been exacerbated by the result of the General Election?
On the bright side, it is worth noting that the occupier base across London is considerably broader than ten years ago, with significant occupiers coming from the life sciences and technology sectors, as well as the financial sector. Alongside this, a number of commentators are predicting a short period of volatility, attributable to property market fundamentals (such as a surplus of new office space as developments are completed) rather than the Brexit effect, followed by a return to capital growth.
Tax
Much has been written on the impact of Brexit on the top-end of the residential housing market, with headlines including “UK luxury homes market slumps after Brexit vote“. But is this the full story?
Over the last few years, there have been radical changes to the rates of stamp duty land tax (SDLT) payable on residential properties. Most recently, this has included an additional 3% charge for second homes and buy to let properties, which was introduced in April 2016.
In the residential buy-to-let sector, alongside the SDLT change, there has been an adjustment to the way which mortgage interest payments are taxed where a property is owned by an individual, which will generally see a rise in the amount of tax payable.
Meanwhile, in the retail sector, a business rates revaluation which took effect at the beginning of April 2017 has had a variable impact. While benefitting some areas of the country where rates have reduced due to a fall in the rents payable (rates bills are based on the rental value of the property), many businesses, particularly those in the retail sector, have been hard-hit, with some seeing their rates bills doubling.
While these taxation changes can be extremely complex to get to grips with, it is important to understand that they can have an appreciable impact on trends within different market sectors. Make sure you look behind the headlines, so that you can demonstrate a clear understanding of the issues to your interviewer.
Technology
Finally, it would be remiss not to mention the growing impact of technology on real estate. From ever-increasing demands for landlords to ensure that their buildings score highly on the connectivity scale, to the impact of online food and retail offerings leading to significant growth in the retail warehouse and logistics sector, to renewed calls for modular housing to be utilised at scale, to the meteoric rise of platforms such as Airbnb, the sector must seek to embrace technological innovation.
Impress your interviewer with a forward-thinking attitude by demonstrating an awareness of how prop-tech is reshaping the real estate industry. An important part of a lawyer’s job is putting the pieces of the puzzle together. The real estate sector should never be viewed in isolation but rather considered together with all the other industries, sectors and other influences that shape it.
Wishing you the best of luck!
Victoria Towers is a property partner at Forsters
