Property Perspective managing director John Jarvis takes a look at the impact Brexit is having on the property market and what some industry experts are predicting.
OCTOBER 31 is a date that will go down in history and it looks like it’s happening whether we like it or not. But what does it mean for the property market and what are the likely impacts that leaving the EU may have?
With Brexit fast approaching, the rate of growth has slowed across the board but many are arguing that the house-price slowdown is a long-overdue market correction, which could be good news for potential first-time buyers who’ve been priced out in recent years.
Accountancy firm KPMG has predicted that house prices would possibly fall by around 6% following a no-deal Brexit, but that they could drop by as much as 20% in a worst-case scenario.
A lot of the outcomes will depend on consumer confidence in the housing market and how it may shift on the basis of a no-deal Brexit. If consumer confidence remains high, house prices should remain relatively steady; however, if confidence dips, then that’s when prices will suffer.
Some things that may help the housing market to even out include reducing or delaying stamp duty and adjusting interest rates.
For those looking to sell existing homes, research by Which shows that homes are on the market for longer time periods (on average 62 days) with 895,000 homes being taken off the market over the past year. This could be a result of homeowners wanting to wait and see how everything pans out after October 31.
However, it’s not all bad news. Earlier this year, RICS published a report that showed there was no slowing down in the construction industry with output growth accelerating and workload gathering pace. Property Eye also recently reported that all regions registered a monthly increase in completed sales, in particular a 32% rise in England.
The Bank of England has hinted that it may have to cut interest rates even if a no-deal Brexit is avoided on 31 October; and even though this may stimulate growth for the property sector and sales figures, it could also mean uncertainty in the market well into 2020.
Whatever happens to property prices, people will always need somewhere to live and major events like births, marriages, deaths, divorce and job relocations will frequently necessitate a house move.
In a tougher trading market, incentives like part-exchange and agency assist are more important than ever to homebuilders. The team at Property Perspective works hard to achieve the highest possible price for every property, while achieving swift sales for existing homeowners, so those customers can go on to complete their new home purchase.