Although there has been a recent change of prime minister, there’s no denying that the uncertainty around Brexit is causing an ongoing impact on the property market.
The one thing that is definite, Boris Johnson wants Brexit to occur on the 31stOctober; with or without a deal.
So, what does all this mean for housing prices?
The Pre-Brexit Housing Price Trend
The average house price increase in June 2016 was 8.2%. However, the growth rate slowed to 2.5% in December 2018 with a fall in London prices of 0.7%, according to the Office for National Statistics figures.
What’s interesting to note, is that the average UK house price has dropped each month since December 2018 until March 2019, however, there has been a very slow growth of 0.72% over the past three months.
Brexit’s Impact on Long-term Effects on the Housing Market
The long-term effects of the UK’s departure from the EU are still not known, especially if there is no-deal.
However, some experts say that the house-price slowdown is not related to Brexit and is part of the normal market correction that happens when we experience high housing prices.
What we have experienced along with the slowing down of the housing price growth, is a 16.5% reduction in house sale transactions.
It appears homeowners are waiting to sell, with young existing homeownersdelaying moving up the property ladder until the uncertainty has settled.
The good news is that interest rates are still low, which has helped homeowners’remortgage and lock in low rates, giving security in a time of uncertainty.
Why Buying for the Long-Term is a Good Plan
If you are considering buying property for the long-term but are holding off waiting to see what the impacts of Brexit will be, then it may be best to act.
Not only is there stagnation in the growth of the property market, but we are also now seeing that supply has dropped too. This means there is less choice for homeowners and investors who want to buy.
In addition, the Pound is likely to continue to lose value and is expected to hit parity against the US dollar with a no-deal Brexit scenario.
This means that London property will more affordable for international investors, decreasing the limited supply even further.
The thing to consider is if the property is affordable for you now and if you’d be happy living there or letting it out for the medium to long-term.
If you are buying a property for the long-term, a further fall in property price won’t affect you, as the value would increase once the market has been corrected.
Even so, we recommend that you seek professional advice, so that you can 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
P.S. Please share your comments below. Are you currently deciding to buy an investment property? How long have you been looking? I would love to know your experiences and thoughts on this topic. I hope our paths cross again soon.