The uncertainty surrounding Brexit seems to be having an influence on everything these days, and it’s fair to say the UK property market is certainly no exception.
Although the market has remained remarkably steady in the two years since the referendum, the approaching March 2019 deadline is starting to make buyers and sellers incredibly cautious. Now with the cabinet ramping up preparations for a “no-deal” Brexit and MPs not set to vote on the deal until 14th January 2019, the future of the property market still remains very much up in the air.
Somewhat inevitably, Brexit is now being cited as the primary cause of a major market slowdown, as house price growth continues to stagnate and buyers remain hesitant in the face of such uncertainty.
Slowdown of House Price Growth
Last month, data from the Halifax House Price Index showed house prices were growing at their slowest rate for almost 6 years, and more recent information from Rightmove shows that the average house price has dropped by over £10,000 since October.
When compared to the same time last year, the months of November and December have seen a combined 3.2% drop in house prices, with areas in London and the South-East seemingly worst affected. In fact, prices in the capital have been continuing to fall year-on-year and have dropped 1.1% in the last 12 months alone.
In the year-to-December, UK house prices overall have grown by just 0.7%, the slowest rate of growth for 8 years; some experts are predicting 0% growth in 2019, though that figure may very much depend on the manner of Britain’s withdrawal from the EU.
But this is a far-cry from the full-blown “market crash” predicted by so many in the lead up to the referendum, and it’s important to note that house price figures are always lower around this time of year. However, although house prices do traditionally drop in the run-up to Christmas, there’s no question that the figures are much lower than usual, which is understandably concerning for prospective buyers.
Lack of Buyer Enquiries
According to brand-new data from the Building Societies Association, over half of the population believe that Brexit is the biggest threat to the UK property market in 2019. The uncertainty surrounding Britain’s withdrawal has inevitably led to a lack of buyer enquiries, with RICS reporting the average house is now taking over 19 weeks to sell.
However, rates obviously vary across the country, with property in Edinburgh and Glasgow still selling incredibly quickly; while those in Swansea and Belfast are being snapped up significantly faster than they were last year. Homes in London, which seems to be bearing the brunt of the ‘Brexit circus’ thus far, are taking an average of 126 days to sell.
With buyers reluctant to buy and sellers reluctant to sell, the property market is expected to remain sluggish until the impact of Brexit becomes clearer. A price crash seems increasingly unlikely, however, and the housing market continues to thrive in most parts of the country; with the number of new property developments at their highest level for over 10 years.