Recent events in parliament mean that there is now an increased possibility of another extension for Brexit come October 31st. While ongoing economic uncertainty continues, we take a look at some of the key statistics on the UK’s housing market to establish possible changes related to Brexit, and what it could possibly mean for the future.
The following is a summary of current statistics, published by which.co.uk and advice from property experts across the industry that sum up the present housing market post Brexit. While the housing market is notoriously difficult to predict, particularly in a situation as unique as ours. It is possible to look at trends and patterns to establish the potential impact Brexit has had on the sector overall.
What Has Happened Since the Referendum?
Average house price slowed year on year since the vote leave campaign won the referendum back in 2016. Immediately after the referendum in June 2016, house prices did stagnate; however, this fell in line with the usual pattern of house prices stabilising over the summer months. This pattern was repeated in 2017, yet it was broken in the summer of 2018 when house prices fell much more sharply than usual. Overall, seasonal trends continue in a relatively normal way, although the average house price in 2019 is not growing any faster than usual, despite the sharp drop of the previous year.
House price growth, however, plummeted in the year following the referendum. By June 2018, there had been an improvement in every UK nation except England. In the last 18 months, however, with continually extended dates for Brexit looming, the rate of growth appears to have once again, slowed. This basically means that for existing homeowners, the value of their property is increasing at a slower rate than pre-Brexit. The news is potentially good for first-time buyers. Recent years have often priced out those who are trying to get on the property ladder. But with only a 0.72% year on year increase in house prices in England, now presents itself as a good opportunity to those in a position to buy.
Another way experts can judge the health of the market is by looking at the transaction volumes. Market uncertainty can have a significant impact on the number of property transactions that occur. July 2019 shows a year on year drop of 12%, meaning that fewer people are buying houses.
While the above statistics are an overview post Brexit, it is worth noting that despite a decline, the housing market has remained resilient and does continue to grow. This is true particularly in the new-build market, with some figures suggest growth had been relatively unaffected.
What Lies Ahead?
Inevitably, the market will change depending on the outcome of October 31st with many predicting a no-deal Brexit would have the most significant impact. It is therefore difficult to advise given an uncertain future. With all of the experts asked, the general advice is to proceed with caution; however, with careful research and planning, it is possible to get a good deal in the current market.
David Blake, a Which? mortgage expert says:
‘Recent price drops in some regions mean that it’s becoming more of a buyers’ market, so you might be able to get a good deal. Besides, buying a property should generally be regarded as a long-term investment and, even if there is a short-term price drop, house prices will probably stabilise in the future.’
Housing expert Kate Faulkner says:
‘Personally, I don’t think buyers should be put off by fears of a house price crash as long as they mitigate the risks. If you bought a property now, even if it did drop in value in the short term, the market would probably have corrected itself by the time you wanted to move (assuming you stayed there for at least five years).’
If you are looking to buy a house, it is essential to have the property properly surveyed. Martin Perry Associates are chartered surveyors and structural engineers in Plymouth and the West Country, with many years’ experience in property and housing. Contact us or take a look at our website for more information on our services and for more articles on housing, check out our blog.