The UK’s housing market responds to a wide variety of issues and developments, which can change with the passing of time and introduction of new policies and desires. Among the issues that has affected the property market for over two years now, is Brexit.
Since the UK collectively voted to leave the EU back in 2016, Brexit has exercised a constant influence on many property-related decisions. While the price of property in London and some parts of the south fell in the aftermath of the referendum result, demand from some overseas buyers increased due to the weaker value of the pound.
However, overall sales activity slumped and has remained weak as uncertainty over exactly what Brexit will eventually mean for the UK, pervades. That uncertainty is still in evidence amid strong expectations the country will leave the bloc with no agreements in place as to how the UK will interact and do business with the EU.
Uncertainty weighs on sales levels
The November housing market survey from the Royal Society of Chartered Surveyors (RICS) highlights the effect Brexit uncertainty is having on the housing market. Indeed, the widely read survey stated that it was considered a main driver of a slow sales market throughout 2018, by many survey respondents.
“Demand has tailed off over recent months, with Brexit uncertainty causing greater hesitancy as the withdrawal deadline draws closer,” said RICS economist, Tarrant Parsons.
Brexit has been named as the reason behind fewer sales and purchases, with a lack of certainty about the UK’s economic future and jobs growth staying many home-owners’ hands. Home-owners would rather stay put than put their property up for sale and buy another, that’s likely more expensive, without having a clear idea of what the future holds for the UK.
The RICS did add that it’s anticipating the downward impact from that uncertainty to ease, towards the end of 2019.
Some opportunities remain
However, while for many home owners, Brexit uncertainty is a worry, encouraging them to stick with what they know, for others, it continues to be seen as an opportunity.
According to property management firm Hamptons International, the proportion of EU-based buyers purchasing property in London was 3% higher in 2018 compared with the previous year. The weaker pound continues to lure their investment, while the lower value of property in the capital is another reason to buy in London right now.
But, if you think it’s the rich investors who are still looking for their own piece of history and an investment that’s guaranteed to appreciate, it appears that it’s less well-known EU nationals who still enjoy visiting the UK or travel to the capital regularly for work, who are fuelling that EU demand for London property.
Meanwhile, Chinese-based buyers are also very present in the London property market, as they seek to secure a home for their student children who come to the UK to study.
Of course, London has always been attractive to overseas buyers. The difference right now is that after years of the ultra-rich looking for a healthy investment, a wider variety of buyers are currently able to buy a home of their own in England’s capital city.
And that suggests the future for the UK’s property market isn’t completely bleak, even with an extended period of Brexit-related uncertainty in the mix.