What Could Brexit Mean for Property Owners?
If you can’t remember a time before Brexit, you’re probably not alone. It seems to have consumed the political landscape in the last three years.
Whatever side of the argument you are on, if you are a property owner, understanding what impact Brexit is likely to have is important. Most of the stagnation in the market can be boiled down to economic uncertainty, not whether you support leave or remain. Property owners are looking for the return of certainty and, hopefully, a welcome boost to the existing marketing.
Here we take a closer look at what Brexit has meant so far and what it could mean once Brexit goes through.
What Has Happened So Far?
In general, the property market has stagnated since the referendum in 2016. This may not be entirely down to Brexit but it can’t be denied that the uncertainty around trying to reach a resolution has had an effect. The market has gradually slowed:
- Prior to the referendum result, UK property prices were up 8.17%
- Just 12 months later, that was down to 4.13% and by the end of June 2018, it was 3.03%
If you are an owner, especially if you have bought your property as an investment, this is not great news. While any property investment should be seen as a long term proposition rather than a quick win, stalls in the market can be worrying.
It’s not just house prices that are a signifier of what state the market is currently in. Activity is also important. This has also declined since the Brexit decision.
Of course, this could be because many are playing a wait and see game and feel not selling is the safer option. For the moment, buyers aren’t buying and sellers aren’t selling, at least in the numbers they were before the referendum.
If you have to sell or buy because of circumstances outside investment, for example, if you need to move for work, it can be a challenging time picking the right moment to make a move.
The question is whether stagnated property prices will change once Brexit is resolved. That’s where things are still uncertain and no one seems to have a straight answer.
What Does a No-Deal Brexit Mean?
The sensible answer is that no one knows what is going to happen. It’s generally thought that the economy will at least take a short term hit if there is a no-deal Brexit but how long this might last, and the effect it will have on property prices, remains to be seen.
Some experts are more pessimistic than others. The Independent reported that credit agencies expected house prices to crash by 10% with a no-deal. On the other hand, if there is a deal, this may have a positive effect on property with an average increase of 1.5% in prices.
We, at last, appear to be reaching the end game when it comes to Brexit and that should return some degree of certainty to the market. Expect a further period of stagnation, however, before the property market begins to move again.