12 March 2019

Brexit Uncertainty: What It Means For House Prices?

Posted by: IanWatson

No matter your political persuasion, it is likely you are keen for some movement or decision to occur with Brexit. Many people, businesses and industries have felt as though their life has been on hold, and the housing market has suffered.

There is no denying that uncertainty often leads to slowdown or stifling of house prices, and there has been evidence to state this has been the case of late. However, there have been property deals, buyers are looking for property, and vendors are looking to sell. Therefore, the market hasn’t ground to a halt and those keen to make a move have the opportunity to do so, albeit more work has to be done to bring buyers and vendors together.

This is an area where the right estate agent can make a difference, and at Mitchells Estate Agents, we have facilitated many sales.

Mortgage rates is an issue many people focus on

One of the issues where uncertainty hampers movement in the housing market concerns mortgage rates. If there were a certainty that rates were going to rise, buyers would be advised to opt for a fixed-rate mortgage to lock in their payments. However, there is no telling what will happen with interest rates, and depending on what happens post-Brexit, interest rates may fall; which would mean a variable rate mortgage would be more attractive.

The Bank of England’s Governor Mark Carney released a statement in September of 2018 stating that a no deal Brexit could see house prices falling significantly. Then in February of this year, he stated that UK growth would fall in a no deal Brexit occurred. However, a drop in growth doesn’t necessarily equate to a fall in house prices. With so many factors influencing the housing market, and different groups being impacted in separate ways, it is impossible to state that there will be a negative outcome of Brexit on housing.

Stamp duty surcharge affected the property market more than Brexit

Concerning a change in transactions, the issue which has had the most significant impact in recent times was the introduction of the additional 3% stamp duty surcharge for people buying additional property.

According to HMRC figures, January of 2019 saw more house sales than January of 2018, with 101,170 compared to 99,830. Therefore, even if there is a no deal Brexit, there is no guarantee it will negatively impact on the housing market. Few people are willing to say it will positively impact on the market, but it may not lead to the gloomy predictions some have made.

Some of the ways Brexit may impact on the housing market can be seen below:

·        Buyers who are likely to stay in their home for the long-term are advised to buy as normal

·        Existing landlords with an established portfolio are likely to prosper

·        The building sector requires skilled workers from abroad, which may be affected by Brexit

Uncertainty always stifles the property market, and with good reason. However, this has always been the case, and property transactions have still taken place. Even though we are no nearer to knowing when, or indeed if, Brexit will take place, there is confidence in the long-term returns on offer from the property market.

Anyone looking to flip the property or move on in a few years may be advised to get more clarity on the situation, but for those who are keen to settle down, now is as good a time as any to make a move.

This line of thinking will also influence vendors who are looking to sell and conclude everything before the market changes. No matter what move you want to make, you will find Mitchells Estate Agents on hand to assist you. As a company, we have operated through many peaks and troughs in the property market, and we aim to help people through many more in the future.

While Brexit is posing a unique challenge to the property market, it is not uncommon for ups and downs to occur. If you want to be confident about what decision you take, get in touch with the local specialists.

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