How Has Brexit Affected the UK Property Market?
Published: 28/10/2016 By Penny
With the uncertainty surrounding Brexit and the typical summer housing slowdown, many people are concerned with the UK housing market and rightly so. Just how has Brexit affected our property market and what does it mean for you? Will home prices rise and will interest in the property market come back? With the full effect of Brexit not able to be seen for many more months, there are still some things that we do know about the effects it is having on the UK today.
First off, housing prices are on the rise. Still not as sharply as they were for this quarter last year, with the difference being a 0.5% increase this summer over last year’s 5.2%. Now, that may not seem like much, but compared to what the country was expecting, a small rise is good. That meant that the average UK home is valued at £205,715.
Simon Rubinsohn, the chief economist at the Royal Institution of Chartered Surveyors, said "All indications suggest that whatever the outcome of the...referendum, in the long term, the imbalance between demand and supply will still exert a strong influence on the market, with house prices expected to rise by close to 25% over the next five years.”
Certainly, Brexit has affected the way we shop and make major purchases. The economic uncertainty will always create a slowdown in sales and this is apparent with the lag that we are having just after Brexit. When major purchases slow down, so will mortgages and that will in turn, slow down home sales as purchasers are more concerned than ever.
However, we are not seeing an overall housing price decline after Brexit, just a slowdown. As supply remains “constrained” for the time being, demand is falling and home buyers who were once anxious are now postponing buying new property. London seems to be the hardest hit but experts are predicting that as more confidence in the UK grows and inward investments are made, the housing market will turn around many areas including London seeing the effects.
So just how concerned should you be about the UK housing market after Brexit? With arguments for both sides of the topic, we feel that the UK housing market will rebound and we will see a surge in home sales when it does.