As Brexit looms on the UK horizon, house sales are falling amid growing fears of a property price crash. These are confusing times for anyone considering whether to buy, with unpredictable property price fluctuation; prices are going up, down or remaining static with no apparent consistency. Price growth does seem to be slowing in former sales hotspots, suggesting an increasingly reserved housing market – but can property currently be a good investment?
One of the trickiest issues for anyone imminently considering a sale or purchase is the extent that the UK property market may be affected by Brexit. With Britain leaving the EU being uniquely unprecedented, the mechanics of the departure are difficult to predict. A good Brexit could mean house prices may increase and a disastrous Brexit could lead to quite the reverse.
As the deadline for Brexit agreements quickly approaches, property owners and potential buyers are likely to wait until after March 2019 This reticence is likely to impact property prices as more and more people opt to ‘wait and see’ rather than risk a costly error of judgement. It is hoped that a recovery in the industry could be seen to start towards the end of next year.
Another impact of an imminent Brexit is the reluctance by overseas buyers also unsure over Britain’s future status. 20% of London property transactions are now completed by non-UK domestic buyers. Overseas purchasers may have a notable share in London property, but the capital’s uncertain prospects continue to make those buyers wary of further investment.
First-time buyers tempted to see any potential drop in house prices as a positive may also be wise to reconsider. A hard Brexit would undoubtedly also lead to stressed affordability and rising interest rates. Lenders are bound to react to changes in the market and likely to make getting on the property ladder even tougher. Higher interest rates and inflation, historically linked with depressed economic growth and rising unemployment, are unlikely to improve first-time buyers’ struggles to afford property ownership.
The UK has a long established obsession with home owning and this has extended towards a national fixation on property prices. As an asset, housing carries the greatest emotional connection but public attitudes have shifted in the direction of seeing homes as an investment. With prospective buyers so carefully considering their options, uncertainty is breeding opportunity as some people gain from others making the wrong decisions.
Property experts with a professional knowledge-base, such as Ali Seytanpir, prefer a long-term view. It would perhaps be wise for property buyers to weather any turbulence caused by an impending Brexit. Many people may be confused by trying to predict industry trends, but any instability caused by Brexit is likely to only be short-term. Britain is essentially economically stable and its property is unlikely to lose any enduring appeal.