Brexit, how will this affect the housing market?
Brexit might be a dirty word for many, but the truth is come October 31st 2019 – it’s happening. There is a huge amount of uncertainty that has waved across the nation, and we know it’s expected to touch on many areas of the UK’s economy. Since the 2016 referendum, one of the most talked about areas to be affected is the housing market. Here we look at what could unfold in the coming months.
How is Brexit affecting house prices?
The property market has been wavering since the referendum in June 2016. Looking at the UK as a whole, house prices were up 8.17% in the year ending June 2016. A year later they had only risen 4.13%, and in the year ending June 2018 the figure stood at 3.03%. Feelings about slowing house price inflation will depend on your position in the property market. Although for most homeowners and landlords, a slowing housing market is rarely a good thing.
Deal or no deal?
It’s clear to see that Brexit uncertainty is holding back activity in the market, as buyers and sellers sit tight. Ultimately, not much is happening. Homeowners aren’t selling, buyers are holding off buying, and people are generally waiting to see how things play out. The truth is no-one really knows what impact Brexit will have, and so it seems the traditional British ‘buckle up’ process has come into play.
The good news
Don’t worry, there is some light at the end of the tunnel. It’s important to remember that the fundamentals that drive house price growth remain the same – limited supply and historically low interest rates. So, it’s unlikely we’ll see a house price crash unless these factors change significantly. This means renters are unlikely to see a sudden increase in rent, and homeowners are unlikely to suddenly be in negative equity.
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