Brexit: Is it a Good Time to Buy a House?


Infographic on Brexit and the UK Property Market

The Brexit saga continues. After months of failed negotiations, sensationalist headlines and wild
speculation, we’re still completely uncertain as to how Britain will actually leave the European
Union, let alone what sort of implications this exit will have. This seemingly unbreakable political
impasse has seen the original deadline come and go, with the future of the property market
remaining under a shadow of doubt.

Unfortunately, it seems as though this shadow isn’t going anywhere soon, as Theresa May has
recently agreed an extension until October 31 st 2019. Although it’s possible for the UK to leave
before this date, the over-arching sense of uncertainty looks set to endure for the foreseeable
future, with prospective homebuyers remaining understandably hesitant.

But how exactly is Brexit impacting the property market, and could now actually be a great time to
invest in property development?

How Brexit Has Affected UK House Prices

Since the future implications of Brexit remain almost entirely obscured, the property market has
started to stagnate, with both buyers and sellers unsure of whether they should hang fire until a deal
has been agreed. Although the market remained remarkably steady in the wake of the 2016
referendum, there’s no arguing that the looming deadline and growing uncertainty is now having an
impact.

The average house in the UK is currently taking around 4 months to sell, while house prices in
London fell by as much as 1.7% in 2018. However, it’s certainly not all doom and gloom, as house
prices have continued to grow steadily in many other parts of the country. Regions in the East
Midlands and Scotland have seen significant growth over the past 12 months, while the North West
saw prices grow by 4.9% in 2018.

Although Brexit is yet to result in a significant drop in prices, there’s no doubt that it’s causing a
significant slowdown in house price growth. At the end of last year, Nationwide reported that
growth had slowed to 0.5%– the lowest rates in 6 years– with areas in the South and East of England
seeming to bear the brunt of the Brexit uncertainty.

The Property Market is Still Incredibly Active

Even though houses are undoubtedly taking a little longer to sell, the most recent HMRC Property
Transaction Statistics show there were 101,780 residential transactions in February 2019, an
increase of 2.7% when compared to the same time last year. In addition, data from Trade Finance
shows that the number of first-time buyers is currently at a 12-year high, with 370,000 newcomer
mortgages completed in 2018.

Should You Buy Before or After Brexit?

There is no straight-forward answer to this question, since the true impact of Brexit still very much
remains to be seen. However, the prospect of a property market crash is causing a great deal of
hesitancy among buyers and sellers. After all, a sudden drop in house prices could see new buyers
floundering in negative equity soon after making their purchase.

Despite a fall in house prices remaining a possibility, so far there’s been no evidence to suggest that
a market crash is imminent. The current slowdown in the market is predominantly a result of the

sheer uncertainty and doubt surrounding the whole Brexit affair, and house prices are just as likely
to rise as they are to fall once a deal has been agreed.

For first-time buyers, in particular, the current state of the market could present an incredibly
appealing opportunity, particularly for those currently enrolled with the Help to Buy Scheme. Since
this government initiative requires buyers to pay a deposit of just 5% (and also includes very
appealing mortgage rates), this is a fantastic time for anyone hoping to make a long-term purchase.

Expert House Price Predictions for 2019

According to a significant number of industry experts, the future of the property market will be
largely dependent on the manner of Britain’s exit from the EU. In the event of a hard-Brexit, the
governor for the Bank of England famously claimed that house prices could fall by as much as 33%,
while other commentators remain concerned as to the potential impact of leaving without a deal.
The general consensus seems to be that the market will remain active, but slow, with the Royal
Institution of Chartered Surveyors (Rics) believing that house prices will continue to stagnate in
2019, with the number of transactions falling by as much as 5%.

However, if you’ve found a home and the price is right, you certainly shouldn’t let any Brexit
uncertainty put your life on hold. This is particularly the case

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