Since the referendum of 2016, there has been uncertainty about how the property market would fare. Prices have continued to grow in most areas in the UK, but they have been slowing with buyers and sellers reluctant to make a move. Which leads us to the question what will Brexit’s impact on the property market be?
The headline figure that everyone is throwing around is the inactivity of buyers and sellers entering the market. In February, the RICS UK residential survey found that respondents recorded a 40% reduction in new buyer enquiries. Although the net balance figures for March, April and May were slightly more buoyant with only a -26% net balance of new buyer enquiries. It’s clear that buyers are reluctant to declare an interest in property until October 31st when they know what the country is doing next.
Alongside that, the number of registered house hunters per branch fell from 296 in March to 265 in April; it also marks a reduction of 21% in the past year when there were 337 registered house buyers per branch.
The average of 237 house hunters per branch was the lowest recorded number since the financial crisis of 2008. This reluctance from buyers is one of the effects of Brexit’s impact on the property market.
It’s not just buyers and sellers who have been put off by Brexit. The number of properties available on the market has decreased. The NAEA Propertymark’s Housing Report states that the number of properties available per branch fell from 37 in March to 35 in April.
Construction output in May saw its most severe decline since the unseasonably poor weather of March 2018. Thanks to the political uncertainty construction companies haven’t wanted to commit, resulting in their employment levels plummeting to their lowest levels in 6 years. With all of this in mind, less houses, less market activity, less new builds happening resulting in fewer construction jobs, Brexit’s impact on the property market looks to be catastrophic.
There is light at the end of the Brexit tunnel, and we’re not talking about deal or no deal. Reports have suggested that transactions are slowly starting to pick up. The number of approved sales per branch were eight in April, an increase on the seven per branch the previous month.
Research conducted by Reallymoving.com shows that house prices could be set to bounce out of the Brexit blip and could potentially increase beyond the dizzying heights of summer 2018.
The data found that UK house prices are set to soar by 9% between May and August, with the North East of England set to increase by 20.2%.
The Financial Conduct Authority’s ‘Mortgage lending statistics – June 2019’ data also reveals that mortgage lending in 2019 is healthier than in previous years.
The start to 2019, saw the negative impact Brexit had on the property market, but as the year progresses there seems to be a more positive outlook for those looking to take part in the property market in the summer.
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