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The housing market, post Brexit vote.

As the dust settles after the vote of the British public to leave the EU, we can start to analyse the effect it has had on the market. Up to now it has been too soon to speculate what will happen, some will say even now it is too soon, but statistics have started to emerge and the housing market seems to be holding steady.

For the time being we are still very much a part of the EU and ‘Article 50’ has not yet been triggered. But as far as confidence in the market goes, there isn’t a noticeable lack of it. The market has steadied after the initial shock. In the months after the vote, there was a slight wobble but most are reporting ‘business as usual.’

In a world where the memory of 2008 is still fresh, property owners, prospective buyers and investors are naturally concerned for the future of property prices. Looking at the graph below, supplied by the ONS you can see we are in a much stronger position now than in past years.

 

chart-1

 

The Market has been characterised in recent years by the lack of supply and an accelerating demand. These conditions make for a very strong market where prices increase and opportunity in investment is fruitful. During the months since the vote, these conditions have been highly favourable to keep the prices and activity buoyant. It seems unlikely we’ll see this change anytime soon, and so activity in the property market should hold true.

That being said however, some commentators say that because of the length of time it takes to complete a house sale, the figures we are seeing are still not fully reflective of activity after the Brexit vote and expect to see the statistics tell a different story over the coming months.

Thomas Fisher, an economist at PwC, echoed these views, saying that “as many of these transactions will have been in motion since before the referendum, more data will be needed to make a proper assessment of how the referendum result is affecting the housing market”.

The autumn selling season, which is traditionally strong, will offer a better picture as to the state of the housing market post Brexit. 

“Our own expectation is that the UK housing market will cool not crash,” said Mr Fisher. “In our main scenario, average UK house price growth is projected to decelerate to around 5pc in 2016 and around 1pc in 2017.” Excerpt from: https://www.telegraph.co.uk/property/house-prices/housing-market-cools-in-first-post-brexit-official-figures-but-p/

A cooling in the market and deceleration in the growth of prices, is good news in comparison to initial predictions the market will falter and maybe even crash. The effect of complete independence from the EU on the overall economy is still to be seen, but if we are to look at our economic resilience after this first stage, we should be optimistic about the future.

Whatever advice you need on your property and investments, our in-house RICS chartered surveyors can help. Speak to one of our team today on 01744 750005.