Brexit: what is the impact on the property market?
Now that Brexit’s uncertainty is behind us, we have collated our research to summarise the impact of Brexit on the property market.
What we’ve found are positive signs for property investors.
Post-Brexit Factors that Impact Property Investors
- Low-Interest Rates Remain Competitive
The Bank of England has reduced the base interest rate to the lowest it has ever been in UK history. The 0.1% rate was chosen to help stimulate the economy after the impacts of the COVID-19 pandemic.
This low rate will benefit property investors, first-time homebuyers and people who want to remortgage their home as we depart the EU.
- First-Time Homebuyers
The record-low interest rate is attracting first-time buyers to get started in the property market. They have the benefit of being exempt from paying stamp duty (for property under £300,000).
With more homebuyers coming onto the market, this stimulates the property market and gives confidence to sellers and property investors.
- Rental Market Growth
Although the interest rates are low, there are still many homebuyers choosing to continue to rent. This decision may be affected by the combination of job uncertainty during the COVID-19 pandemic and Brexit’s impact.
Some existing homeowners have chosen to sell and move back into rented accommodation to see what happens to the property market.
- Increase in London stock
With the combination of the Brexit uncertainty and the COVID-19 pandemic, we saw many Londoners sell their homes and buy 73,950 houses outside the capital. In fact, it was recorded to be the largest amount spent on property outside of London, since 2007.
The increase in out-of-London sales was driven by the following factors:
- A need for larger homes with space for home offices
- A desire for a garden
- Flexible working from home arrangements
The good news is that this has led to more London stock being available for property investors and homeowners to purchase, leading to increased confidence towards investing in the London property market.
- Seven-Year Property Cycle on Track
During the Brexit uncertainty, there were claims that the housing market had slowed down. However, some experts said that the slowdown was not related to Brexit, COVID-19 or the seven-week shutdown of the property market.
Instead, it was part of the normal market correction known as the “seven-year property cycle.” The experts confirm that the natural property cycle is in effect.
- Rise in Property Value
There is an uplift in the London property market, with the UK housing prices rising at their fastest rate in nearly two years.
The COVID-19 pandemic was a volatile time for the 2020 housing market. Still, after the spring lockdown, the release of property saw house prices rise, leaving the property market in reasonable shape for the crucial spring season.
Why Now is the Right Time to Buy
If you are considering buying an investment property but had held off waiting to see what the impacts of Brexit were going to be, we recommend now is the time to act.
With the Brexit deal being done, we expect to see more confidence gaining within the property market. The elimination of the no-deal Brexit threat also means that the market is no longer “on hold” waiting for major disruptions.
The post-Brexit factors show a resurgence of confidence in the property market, which means it is an ideal time to buy before property prices continue to rise.
Even with these positive signs of growth, we recommend that you seek professional advice to make a considered decision.
At REKA Property Management, we give our clients the facts about the property industry and the opportunities to increase their rental returns while adding value to their investment.
If you want to know how to achieve solid rental returns and have peace of mind with your property, then call us on +44 (0) 203 286 6468 or email us at Admin@RekaProperty.co.uk
Doug
