Despite gloomy predictions for how Brexit will impact house prices, the UK property market has shown resilience since the vote to leave the EU in 2016. And the housing sector is certainly expected to cope much better with Brexit than the financial crash of 2008.
It’s not all doom and gloom
With the Brexit date of 29 March drawing closer, buyers in the property market have been subdued. However, Aston Mead Land & Planning, one of the leading land brokers in the Home Counties, believe pent-up demand will feed back into the property market next year.
Richard Watkins, director of Aston Mead Land & Planning, commented: “Despite the risks involved in the current challenging market conditions, we expect that come April 2019, those hoping to trade up will find that the gap in sale values and onward purchase prices will be the narrowest it has been for half a decade.”
Once Brexit negotiations are finalised and the UK has officially left the EU, activity in the housing sector could pick back up. Nationwide’s chief economist Robert Gardner stated: “If the uncertainty lifts in the months ahead and employment continues to rise, there is scope for activity to pick-up through next year. The squeeze on household incomes is already moderating and policymakers have signalled that, if the economy performs as they expect, interest rates are only expected to rise at a modest pace and to a limited extent in the years ahead.”
Others feel prices and transactions won’t necessarily increase but will remain steady.
James Greenwood, regional director of Stacks Property Search, stated: “More supply will be matched by more demand and I don’t expect us to see any dramatic rise or fall in prices across the board.”
Regional markets are expected to be the most resilient
Regional markets are predicted to continue to fend off economic uncertainty and boast the most growth in the UK housing sector. In a recent article based on Hometrack’s UK Cities House Price Index, Zoopla named the best cities to buy property. Leicester, Edinburgh, Manchester, and Birmingham were inside the top four, with Liverpool, Sheffield, and Leeds making it into the top 10.
The north of England has led the way with property price rises in the UK of late, including Manchester boasting the highest price growth in the UK for five of the last six years. A report by Savills has also forecasted values in the north-west to increase by 21.6% over the next five years, and many have predicted the north will show resiliency leading up to and after Brexit.
London and the south-east of England are expected to feel the brunt of Brexit in 2019. Property Wirerecently analysed the latest Reuters poll saying,
“Property values in the capital, long a haven for foreign investors, more than tripled in the last 20 years, but demand and turnover have crumbled since the June 2016 vote to leave the European Union and property taxes were raised.”
Technology will continue to transform the property market
Embracing technology is the way forward for the property market, and it seems a variety of fields in the housing sector are catching on. Chances are 2019 will see a rise in the adoption of proptech, which will continue to transform the market.
In Zoopla’s “State of the Property Nation 2018” report, estate agents said they were most likely to increase their use of technology in order to combat the current economic climate and pressure to lower fees. Additionally, planners and conveyancers are being pushed to adapt technology to improve the building and homebuying process.
Many experts have stated the UK property market needs to be disrupted, and a positive way to do that is by taking risks, including adapting to the digital age and seeking out innovation to improve efficiency and boost the housing market.