If you have watched any news whatsoever in the past few weeks, you are likely already aware of all the latest Brexit developments. But as the vote has now been delayed by another 6 months, you may be wondering what effect Brexit is going to have upon the property market in this intervening period. Although the date currently seems set for 31 October, the established trend of uncertainty and delays seems set to continue. Resulting in a stagnant market with no definitive conclusion or resolution in sight.
With this in mind however, let’s take a look at some of the exisiting effects that Brexit has already had upon the market, as well as the predictions some experts have for the future.
What effect has Brexit already had?
According to RICS (Royal Institution of Chartered Surveyors), throughout March, the UK continued to see a decrease in demand from buyers as well as new property coming into the market. A trend that they claim has been evident in the wider climate for a number of months now. They have directly attributed this pattern to buyers apprehension surrounding property investment, especially given the uncertainty currently present in the trade as a result of Brexit.
With Simon Rubinsohn, RICS Chief Economist, claiming that: “Brexit remains a major drag on activity in the market with anecdotal evidence pointing to potential buyers being reluctant to commit in the face of the heightened sense of uncertainty”.
It has been argued by some however, that this change simply reflects a natural adjustment in the market, following the past several years of growth.
What impact would a hard Brexit have?
Via Zoopla, Nicky Burridge claimed that the previously mentioned fear of investment has also led to a rise in the number of individuals choosing to rent propety, as a pose to owning. Leading to predicitions of a 2% rise in the average rental fee over the next 12 months.
And with a hard Brexit potentially on the horizon, things are not looking promising for the future. Back in November, Andi Micheal predicted, via Really Moving, that the possible termination of free movement would result in a further increase in the number of renters. Specifically citing the new immigration from Europe as being the primary cause for this scenario.
What’s more, it has also been suggested these changes to immigration will negativatley impact the construction industry. More specifically, the possibility of a hard Brexit may affect the citzenship status of many EU nationals. Potentially causing a significant loss to a large portion of the UK’s current labour force.
What are the current predictions?
This has also been suggested by the Director of Policy and Practice Chris Norris who anticipates the following difficulties: “The issues troubling most landlords are the status of non-UK, and in particular EU, citizens, given their responsibilities to police the Government’s Right to Rent policy, as well as the overall impact that divergence [Brexit] will have on the stability of the housing market.”
However, others have suggested that the current climate is acutally creating a brief opportunity in which to invest in property. More specifically, the Founder and Director of Property Experts, Bruce Burkitt, affirms that “Brexit is simply a condition in the market and an economic challenge that we are experiencing at the current time, but it’s actually a great opportunity for people to buy.”
He goes on to claim that “Contrary to common thought, a volatile, falling market creates a great opportunity to buy, if investors adopt and follow specific guidelines.”
What to read next
For more information on any of the experts cited in this article, you can find the original sources from the list below:
- Brexit impasse continues to challenge the market – RICS
- Brexit remains drag on housing – Zoopla
- What impact might a hard Brexit have on the housing market? – Really Moving
- NLA In Action – National Landlords Association
- Has Brexit created the perfect climate for property investment? – Property Reporter
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