By Carlin Peton
Brexit has been at the forefront of all political debate for quite a while now. Yet, three years after the referendum, much is still uncertain. One of the nation’s biggest worries is how it will affect the property market? Should you buy property before or after Brexit? Will house prices fall after Brexit? And the list can go on…
Whether you currently own a house or plan to buy one in the future, it’s important to know if Brexit will wreak havoc on property prices or give you the opportunity to reap great rewards.
Since the Referendum
Statistics show that there has been little variation in house prices since the referendum in 2016 and in some regions, the UK property market has been growing. Although, London house prices have taken a hit. It’s possible and in fact more than likely that Brexit was not the reason. London has been experiencing severe levels of crime and many people have left to other areas of the UK. According to the ONS, murder and manslaughter figures reached a 10-year high in 2018 with 732 people killed. In short, there is little evidence to say that the decision to leave the EU has greatly impacted house prices so far.
Nonetheless, that is not to say it won’t in future.
A soft Brexit, or a deal Brexit essentially means that our government have negotiated the terms of the withdrawal agreement with the EU.
The state of UK politics is in constant transformation, as is the leadership for the country. It is uncertain who will be leading the Brexit negotiations, particularly as the race for leadership has only just begun.
In general, markets and people prefer certainty over the unknown. This means there’s a chance that Brexit wouldn’t really affect house prices. Although, this is the really optimistic narrative of life after Brexit.
A Global Future report has predicted that demand for skilled labour across social care, nursing but more specifically construction will require an extra 47,000 migrant workers from the EU. This could put the supply of housing at risk, spelling a disaster for the property market. This is why some people have projected that house prices could increase by alarming amounts.
A hard Brexit sounds means that we will now leave without a deal. Britain would be leaving both the single market and the custom union.
A lot of people find the prospect of a no deal incredibly unnerving. People want to know what will happen when we leave the EU which can leave a nasty effect on the housing market.
Some even go as far to suggest that a hard Brexit means the construction industry would be set for a clean break and homes could be built quicker because of less red tape. This would lead to more homes being built and also reduce the value of houses in the UK.
This is both good and bad. If you’re someone who’s been eyeing the property market for some time now, you would be in an advantaged position. On the other hand, if you’ve been thinking of selling your home, this is not particularly great for you.
Whether a soft of hard Brexit takes place, doubt is the bigger threat. Uncertainty has crashed some of the largest markets and has the worst knock-on effects. This can be managed but a lot is still unclear.
Brexit and Mortgages
Mortgage rates remained at historic lows. There is little room for interest rates to drop compared to how much they could potentially rise.
Experts have recommended going for a fixed rate mortgage if you are interested in buying a house. This will help overcome the uncertainty of Brexit and help you understand how much you will be paying on a regular basis.
Should you buy a house after Brexit?
When buying a house, you should remember that Brexit is not the only factor. Supply and demand are affected by a range of factors, other than Brexit. Brexit is a big consideration but don’t let it be the determining factor.
Essentially, you should not base your decision solely on how Brexit plays out.