Weighing Up Brexit’s Impact On The Property Market
Since the referendum vote to leave the EU in 2016, there has been great speculation and concern over how Brexit will affect the UK property market. Over the past three years the uncertainty over Brexit has led to a much greater degree of hesitancy in both buyers and sellers, causing dips in the market – particularly in London, the South-East and East Anglia, although some areas like Scotland, Northern Ireland and Wales have seen a gradual increase in property prices.
House price predictions for 2019
With the predicted leave date postponed to 31st October, The Guardian predicts house prices UK wide will fall over 2019, with London and the South East likely to see the biggest drop. While uncertainty over Brexit is undoubtedly a key concern affecting house prices, there are also other factors such as the problems faced by first time buyers, particularly in London and the South East, and the tighter than ever restrictions on mortgage lending.
What is the pre-Brexit market like for sellers?
In the lead-up to Brexit, people are wary of buying or selling property due to the economic uncertainty around the potential impact Brexit will have. Demand for housing means properties are still selling, although sellers are likely to find the whole process takes much longer, with the average time for a house to go under offer rising to 77 days in January 2019, against the average 57 days in 2015.
What would the impact of a no-deal Brexit be?
The prospect of a no-deal Brexit has precipitated many horror stories of economic downturns, financial chaos and long-term recession. In relation to the property market, Bank of England governor Mark Carney predicted a 35% drop in the case of a no-deal.
In reality, there’s no way of knowing what the actual impact of a no-deal would be, although it’s likely the current climate of uncertainty when it comes to buying or selling would cause the property market to, at best stagnate, at worst, take a fall. How big a drop and how long the effect is likely to last however, there’s no way of knowing.
Future short-term impact of Brexit
In the short term, the impact Brexit has on the property market may well depend on how the UK leaves. It’s likely a no-deal scenario will have a significantly more negative effect on the market than a softer exit via a withdrawal agreement and including a transition period. Either way, we’re likely to see a slowing down of the property market in the short-term.
The long-term impact of Brexit
Despite the current uncertainty, the strength of the UK property market, and the fact that it has, by and large, withstood the testing climate of the past three years, makes it unlikely that Brexit, however and whenever it comes, will cause a property crash. While experts agree there will be an impact and are bracing themselves for a slower, less buoyant property market than we’ve been used to in recent years, the fact demand continues to outstrip supply of housing will likely keep the housing market relatively stable in the long-term.
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If, like many home owners, you’re choosing to stay put and invest in renovating or extending your home instead of moving, we can help! At Abbey Lofts we specialise in designing and building loft conversions to help homeowners make the best use of their space and add value to their properties when ready to sell.
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