Article 50 was triggered on the 29th March 2017, the very moment Brexit became official and the European Union was formally notified of the UK’s decision to leave the EU.
So where do we go from here? What are the predictions for the UK property market.
The property market will add stability
We are seeing shots of stability injected into the UK property market at every juncture of the Brexit timeline.
This is very much about encouraging people to get on with living their life. We are seeing increased confidence and this is turning the market into a seller’s dream, with higher prices being demanded.
Increase in the number of house sales
The residential property market is already breathing a sigh of relief at the sound of Article 50 being triggered. The government has finally provided certainty and that absolute confirmation that leaving the EU is full and final.
Much of the global property markets are supported by confidence, this is no different in the UK property market. House sales were down a good 20% since February 2016 to February 2017, this is mostly about buyers and sellers holding on until they know what is what.
Interest rates to remain steady
While we are seeing an increase in inflation, the Bank of England is reluctant to increase interest rates. This is ultimately about preserving affordability and leads us to conclude that we are in a low turnover market, with little pressure being exerted on prices.
Price increases are likely to be slow
While the expectation before the referendum was that house prices would collapse, has since proven to be way off the mark. We are seeing house prices increase in all regions of the UK, even in London which is the single region expected to feel the full force of Brexit.
A lot of this will come about from the negotiations which the UK are expected to thrash out with the EU over the next couple of years.
Demand outweighs uncertainty
Even with or without a membership of the European Union, we have the small matter of demand. The UK is suffering a chronic shortage of housing stock along with an overwhelming level of housing demand. Even with uncertainties, demand is still going to remain.
Caution is greater in London
Given the ratio in which house prices have increased relative to earnings in London for the past decade, caution is greater in London than elsewhere.
Buying a property in London is a bigger financial commitment in comparison to the rest of the country, therefore Londoners have more to worry about than others.
While some buyers will sit on their hands and wait to see changes before making their next move, overseas buyers are making the most of the weakened pound and the 10% to 20% discount this is providing.
Overseas buyers see opportunities
While the UK domestic market has already felt some of the effects of Brexit, we are seeing the reverse effect from the international buyers.
The pound is weakened and therefore buyers from overseas are piling in to prime central London property. Though, we are seeing asking prices increase reflecting the increases in stamp duty.
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