What Can We Expect from the UK Housing Market Throughout Brexit?

Brexit has left many of us asking questions about the future of the financial market in the country and also the state of the housing market.

Brexit has already impacted the pound, although supposedly after Trump’s election it improved against the dollar, but in October – four months on from the referendum – it hit a 31 year low.

This fall of the pound is having a negative impact on the housing market and estate agent Savills predicts zero growth in sale prices in 2017.

While the Help to Buy Mortgage Guarantee is due to end soon (the Equity Loan is still available on new builds however), a replacement could be actioned in its place as those first time buyers would still struggle to gather a large enough deposit without a 95% mortgage on offer. The property market might stagnate with prices, but where they have stagnated is still unachievable as they rose in price faster than the cost of living could compete.

The East, South West and South East will apparently benefit from a house price growth in 2017, but the rest of the country will see a significant drop with areas such as Scotland and the North East experiencing drops of over 2%.

Confidence in the housing market is also having an impact as it took a dip after the events in June, and buyer demand dropped significantly after the Brexit vote, which means the demand for housing is actually lower than normal; another reason why property prices could have come to a standstill.

The rental market however will enjoy a boost, and landlords will be quick to hike up their prices to take advantage of the saturated market. The rental market is not as regulated as housing, where new developments and communities are actively encouraged and created to offer people a place to live.

Developers such as First Urban, directed by Jason Harris, understand this need. He said: “We acquire land that could be developed into something useful, the developers purchasing or leasing this from us want to create sustainable communities and while Brexit may have an impact on the prices of properties and the ability to quickly turn developments around, it won’t hinder this ideal.”

Therefore, as more and more people turn to renting as they feel they cannot enter the housing market for fear of financial difficulties further down the line, we could see poor quality housing being rented for extortionate prices and families still struggling.

Of course, until Article 50 is actioned and the Government highlights what it intends to do about affordable housing then this is all speculation, so plenty of research and finding the right home that should increase in value in the future is key to a house buyer’s success.