Since David Cameron promised to hold a referendum regarding whether the UK remains or leaves the EU in 2015, there has been discussion all around Britain regarding what is best for the UK. But within the story, as we all know, on the 23rd of June 2016, the British people decided to leave the EU; which as made Brexit conversation non-stop. Through news outlets, each day there has been updates in some form about all aspects of how the UK may be affected by ‘Brexit’. But, how will this impact the UK’s housing market in the long term? This article intends to understand the UKs current position and decipher between predictions made for the future.
As this is currently being written, as four nations, we sit at a crossroad. The 31st of October is coming closer, and many are unsure as to what is happening.
At the start of October 2019, Rics (the Royal Institution of Chartered Surveyors) conducting a survey across the UK regarding homeowners selling their property. The survey found that fewer homeowners are putting their property on the market, with one of the most prevalent factors being the uncertainty around Brexit. Also, the survey found that the amount of new inquiries from buyers has fallen.
As well as Rics carrying out their own research, other industry leaders have produced research around housing and Brexit. Again, at the start of October, Halifax recorded that housing prices are rising. Although, the rise is at the slowest annual pace for over more than six years. In September, the lender recorded the lowest rate of growth (around 1.1%) since April 2013.
Wherever online users currently look, there are always latest predictions from many online company websites. With so much information widely available, it can be slightly confusing which articles to read and take in, and which to take with a pinch of salt.
At the start of September, KPMG produced their own research on their predictions for the UK housing market within future years. According to the report, the market will be defined by the type of deal/exit the UK has. If the UK were to leave with a deal, then KPMG predict that housing will stabilise towards the end of 2019 and start of 2020. Although, if the UK left with a no-deal Brexit, it could cause falls between 5.4%-7.5% across regions in 2020.
Also, within the report, the Chief Economist Yael Selfin commented that in the worst case scenario, there could be “more severe falls of around 10-20 per cent [are] also possible if we look at historic precedents”. However, these predictions are way of the Bank of England’s forecasts. The Bank of England previously warned that in the vent of a no-deal Brexit, the UK could face up to a 30% fall in house prices.
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Unfortunately, Brexit and the housing market it a continuing story. The next few weeks and months will be significant to the type of deal the country gains. From there, the housing market will be able to decipher more so accurate picture of predictions swarming the UK housing market.
It is also worth taking into consideration that Brexit isn’t the only factor to be taken into consideration when looking at future predictions. Another factor to UK housing that must be addressed is that the UK is currently part of a ‘housing crisis’; meaning there is insufficient supply to the ever-growing demand. According to the news outlet Real Homes, the UK has twice the population of Canada, but is only building half the number of new homes. With Brexit, this has exacerbated and in turn may have made buyers and sellers alike anxious to move on their own property ladder.
I started writing for PPO back in August 2019. I particularly enjoy writing about new housing developments and upcoming property events.