Brexit has unsettled the property market in many ways:-
- Net migration to the UK is at a ten year low. No doubt many immigrants are waiting to see if/when Brexit happens, OR they've given up on the idea of moving to the UK altogether
- Many home buyers are anticipating a house price drop post-Brexit and are postponing looking for properties. This has a self-fulfilling prophesy effect of actually reducing demand and thus prices during the lead-up to the eventual exit date.
- Businesses in general are taking a "wait and see" approach in terms of making any big decisions - which is having a negative effect on business in general
- There is uncertainty on the actual Brexit date - will 31st October be the date that Britain leaves Europe, or will it be delayed further? Markets hate uncertainty
So does the HOUSING market hate uncertainty? It certainly does.
We've been in a long period of uncertainty in regards to Brexit - as to if it will happen, and when it will happen. The most certain thing about this kind of uncertainty is that buyers put off buying decisions. They become more conservative and they weather the uncertain times by having their wealth in more liquid assets like hard cash, stocks, bonds, precious metals. The fear they have is buying a property in the lead up to Brexit only to see their newly bought property crash in price upon Britain leaving the EU.
The normal advice is to not try and time the housing market, particularly if your next property is going to be your "forever home". However, there's been such fear-mongering with Brexit that it's actually caused many to effectively time their buy after Britain leaves the EU, anticipating a "property sale" at that point.
On the seller's side, some are rushing sales through and accepting lower prices - because they think their property price will be even lower post-Brexit.
So is Brexit pricing itself in to the housing market? It looks like it. London and the South East have seen nominal price drops in average property prices of around -2%. The rest of the UK has largely seen sub 1% gains year-on-year, which is below inflation and much lower than the gains they've enjoyed in prior years.
If Brexit is being priced in, then the interesting effect is that the market shouldn't be too affected by Brexit when it finally happens. However, we will have to wait and see if that's the case. Article kindly provided by wellcleancarpetcleaning.co.uk