Whether you’re a staunch remainer or avid Brexiteer, there’s no denying that the uncertainty around when the UK will leave the EU, and the terms under which it may happen, is causing property market uncertainty.
On Tuesday, Theresa May said that it might no longer be possible for the UK to exit the EU on 29 March 2019 as originally planned, although this still remains her preference. The prime minister has promised to put her withdrawal agreement to MPs for a ‘meaningful vote’ by 12 March. If, as many predict, the deal is rejected again, Mrs May has offered two further votes: one allowing MPs to rule out leaving the EU without a deal, and another allowing her to push back the Brexit date.
The announcement followed Labour leader Jeremy Corbyn’s declaration on Monday that he would back a second EU referendum if Labour’s own proposed Brexit deal wasn’t adopted. Many are now predicting that Brexit will be delayed until the end of June at the earliest.
What might a no-deal Brexit mean for house prices?
Many business leaders and financial experts have expressed concerns about the potential consequences of a no-deal Brexit. In September 2018, Bank of England governor Mark Carney warned that leaving the EU without a deal could send house prices tumbling by a third, and this week he added that UK growth would be ‘guaranteed’ to fall in the event of a no-deal Brexit.
So, what does all of this mean for the property market, and what impact has the vote to leave the EU already made on house prices and sales volumes? New analysis of the property market activity before and since the Brexit referendum indicates what experts from the estate agency, building, mortgage and buy-to-let sectors think will happen over the coming months.
What’s happened to house prices since the Brexit vote?
House prices did stagnate for a while following the referendum in June 2016. This could well have been down to the usual pattern of prices growing in spring and plateauing over summer, which was also apparent the same month in 2017. But, with Brexit looming ever closer, house prices suffered a bigger post-summer dip than usual in 2018, dropping from a peak of £232,797 in August to £230,630 in November.
The latest ONS House Price Index shows that they crept up slightly in December, meaning that the current average UK house price is £230,776.
Are UK house prices falling?
Looking at year-on-year house price change over the longer term can be another useful way of understanding what the market’s doing. Transaction volumes since the referendum is another way of judging the health of the housing market by looking at transaction volumes, meaning the number of property sales in any given month. A lower number of sales can indicate market uncertainty, which is often triggered by events such as an election or a referendum. According to HMRC’s most recent seasonally adjusted figures, there were actually more house sales in January 2019 – 101,170 to be exact – than in the same month the year before (99,830).
What’s the pre-Brexit market like for sellers?
Two commonly used measures of how the market is performing for sellers are stock per branch – which is the average amount of properties on each estate agency’s books – and time to sell. In January, the average time for a property to go under offer shot up to 77 days, the highest it’s been in years – and this could be partly due to nervousness around buying a home in the run-up to Brexit. Stock per branch was also up year-on-year, from 42 in January 2018 to 45 in January 2019.
As it stands, the only thing that’s clear is that nothing is clear, and you’d be justified in having no idea whether now is the right time to buy, move, invest or remortgage.
Source and information provided by Which.co.uk