How has Brexit affected the property market?
Leading up to the EU Referendum property prices were surging, but post referendum, there have been mixed reports on possible long term effects.
Figures from the Office for National Statistics actually showed property prices in May increased by 1.2 per cent (or £2,400) compared to the previous month.
On the negative side, other reports have showed London suffering from a sharp slowdown, and one London estate agent recently told me that, “Brexit was decimating everything”. He added that buyers were using this as an excuse to knock money off the purchase price, which of course will create a false dip.
Others have stated the opposite and said that the London property market is in its own bubble, and despite a few early wobbles, things have now started to stabilise. Other experts have predicted that any drops will be short lived. The fall in sterling means there will be more investment from overseas buyers, especially in London.
More positives are that mortgage rates are remaining at exceptionally low levels and employment at present is at a record high, which will have a positive effect. Also, in the long term, if EU rules no longer apply to mortgages, banks may increase their lending.
One consistent observation is that the fundamentals of our housing market will stay the same, i.e. we have a shortage of homes and a consistent demand. This demand is likely to worsen, as plan for more ‘affordable’ housing have been put on hold.
In these uncertain times, it is no surprise that there will be less transactions overall, as people simply ‘wait and see’ – although it could take years, if not decades, before we actually leave the EU.
So, a short term wobble, with recovery in the long term seems a definite possibility.
Our team of residential property lawyers are experienced in dealing with all aspects of residential conveyancing. We ensure we provide our clients with the best possible service that is tailored to meet our clients’ individual needs. If you have any questions, please call us on 01730 268211 (Petersfield) or 01730 816711 (Midhurst), or email me at email@example.com.