In? Out? Shake it all about. You do the Brexit Hokey Pokey and you, erm, well, nobody seems to know.
Regardless of whether you want to Remain or Leave, here we are—waiting. All the while the UK economy ticks along, but there is still plenty of uncertainty over what leaving the EU entails for Britain.
In the aftermath of the 2008 recession, the UK property market has been on the rise, with house prices increasing year on year. However, since the referendum result of 2016, that calmness has given way a layer uncertainty which sees some people acting with an element of caution when it comes to buying and selling.
And the Article 50 extension only adds fuel to the fire about what happens next. As property experts, we can’t say what the final deal will be, but we can comment on the current state of play in the UK property market.
House prices since Brexit
Following the referendum, house prices did slow in pace, though it’s hard to attribute the slowdown to Brexit specifically. In 2017, prices also saw a slight dip as the spring months turned into the summer, having increased previously.
However, the closer we get to Brexit, the more it seems like that house prices will take a dip—if only marginally. House prices across the UK took a more considerable post-summer dip than usual in 2018, going from £232k to £230k. Then, in December 2018, they were on the rise again according to the Office for National Statistics (ONS).
The Brexit effect
Looking at the numbers year on year since 2014 it’s clear to see that house price growth has slowed from 2016 onwards. The biggest question most people have centres around whether or not Brexit is solely responsible.
From a purely black and white perspective, it’s hard to argue against Brexit being the signifier for the dip in house price growth. But, like most things, there is always a grey area attached—and it could be a case of the market finally evening itself after rapid growth in years gone by.
Brexit could simply be a side act to something that was going to happen at some point or another. It’s also worth pointing out that house transactions didn’t suffer much in the wake of the referendum. There were more house sales in January 2019 than the same month the year before, according to HMRC.
The last few years have seen some stagnation for home buying in areas across the UK—especially in London and the south. Much of this is as likely to be in relation to stamp duty changes and new tax restrictions for landlords as it is Brexit. It only takes one pocket of the market to dip for numbers to be affected across the board.
With slightly lower movement in the market, there is an argument to be made that buyers are having a better time than sellers in some areas of the country. But even they are questioning whether it’s worth investing given the uncertainty of Brexit.
Buying a home is a long-term investment. Even in the unlikely event of a house-price crash, the market will most likely correct itself by the time people decide to sell many years later. And many are locking themselves into five-year mortgages as extra security against any possible dips.
Brexit and the future
Right now, nothing is clear, and all the possibilities—no-deal Brexit, Brexit with a deal, second referendum—are on the table to some extent. There is also no guarantee that this will all be sorted by April either, with more delays a real possibility.
Once there is some clarity over the whole situation, it’s likely that there could be a flurry of activity, with people feeling more confident in their decisions. In the meantime, the market still ticks along, and the fundamentals of buying and selling property haven’t really changed.
Houses are still listing on the market, as Brexit hasn’t stopped our world from turning. As a population, we still need to move, to upsize or downsize as our family changes, or we need to sell or move because of divorce, marriage, death or birth. Life hasn’t stopped because of Brexit.
Check out the emoov online valuation tool for a quick insight into the value of your property. With the latest available data from the market and your specific area.
If you would like advice about selling your home call us on 0333 300 2526 and one of our property experts will be happy to help.