When, on 23rd June 2016, the British public voted by majority to begin the process of leaving the European Union, there was much speculation about how this decision would impact the future of the UK property market.
While the official date for Brexit has been and gone, with little progress in regards to deal terms, market experts are already beginning to recognise and report on how Brexit is affecting the UK property market. We talk you through each the biggest indicators of a changing market...
1.The average price of a London home fell 3.8% in the last three months
According to leading lender, Nationwide, between January and March 2019, the average price of a London home fell by 3.8 per cent to an average of £455,594, compared with the same time period in 2018.
For context, this was reported to be the biggest price drop seen in the UK since the 2009 financial crisis, which knocked an average of £18,182 off house prices.
On top of this, market reports have also suggested that this was the seventh consecutive quarter in which house prices have dropped since Spring 2017.
2. And it’s a similar story across the rest of the UK
It would seem that these average house price reductions are affecting more than just the London property market, too, with the same Nationwide survey suggesting that the ‘Outer Metropolitan’ commuter belt has witnessed a two per cent fall to approximately £355,978 average house price.
3. There has been a decrease in the number of buyers entering the market
It’s fair to suggest that political uncertainty, triggered by Brexit, has put many buyers off entering the market.
Commenting on this, Managing Director of Mayfair Estate Agent Wetherell, Peter Wetherell, states ‘it’s unsurprising that there has been something of a slowing in terms of buyers entering the market, with many holding out from investing until there’s a little more certainty.’
Peter also added, however, that there has been ‘a considerable increase in interest since the beginning of 2019, with more viewings in the ever-popular Mayfair than has been seen since Brexit was announced.’
It could be fair to surmise, therefore, that this dip in the number of buyers entering the market is only a temporary thing. Once there is a little more certainty in the market, these figures can be expected to pick up once again.
4. Buyers are making increasingly aggressive offers
While, on the whole, buyers are making less offers, the offers they are making are proving much more aggressive. In times of uncertainty it’s definitely fair to suggest that there is power in the buyers hands to dictate the pace of the market and get much more for their money.
It’s not all doom and gloom, however, with Howard Archer, chief economic advisor to forecasters the EY ITEM Club suggesting that ‘the economy in headed for a growth of 0.2 to 0.3 per cent in the first quarter of 2019.’ While March was always expected to be a tricky month, given the 31st March being given as the proposed Brexit date, growth is expected in the months following.