For over 2 years, Brexit has been completely dominating the headlines. However, as the March 2019 deadline looms ever larger, the future of the UK property market remains shrouded in ambiguity and uncertainty.
As negotiations continue to stall, recent reports suggest that both the UK government and European Commission are making preparations for a “no deal” Brexit; with MPs not voting on the deal until 14th January next year. Although the full implications of a hard Brexit are still unclear, estate agents and property experts are already predicting how Britain’s withdrawal could impact the market in 2019.
What’s Happening Right Now?
However you decided to vote in the 2016 referendum, there’s little doubt that the uncertainty surrounding Brexit is already resulting in a particularly sluggish market. Recent figures show that the average house price in the UK has dropped by just over £10,000 since October, while RICS report that the average property is taking around 19 weeks to sell.
With negotiations hanging in the balance and the deadline approaching ever faster, buyers and sellers are remaining understandably cautious. The result is a market which seems to be holding its breath before a great plunge, as property owners wait to see exactly what kind of impact Brexit will have on the value of their homes.
Despite all of the chaos, however, house prices have still seen some annual growth- albeit just 0.7% in the last 12 months. Additionally, it was recently reported that the number of new property developments is at a 10-year high, which is fantastic news for first-time buyers looking to step onto the property ladder.
What the Experts Are Saying
The future of the property market still very much depends on the manner of Britain’s exit from the EU, with most experts agreeing that a hard Brexit will be much more damaging than the deal Theresa May has put on the table.
The governor for the Bank of England, Mark Carney, caused a wave of panic back in September after claiming that a “no deal” Brexit could see house prices fall by 35%. However, Carney has since clarified he was simply outlining a worst-case scenario, and it’s incredibly unlikely that Brexit will cause such a dramatic market crash.
In fact, one senior economist, Howard Archer, is predicting just “modest” price drops in the event of a hard Brexit, while also expecting a 2% rise in 2019 if a deal is successfully negotiated. Russell Galley, Managing Director of Halifax, has been quoted as predicting a 0% to 3% rise, but property commentator, Henry Pryor, believes house prices will fall by 2%.
Real estate advisor Savills are expecting house prices to rise by 15% over the next five years, bringing the average property up to around £248,000; while also predicting prices in London will increase by 12.4% between 2019 and 2023. Strutt & Parker are even more optimistic, forecasting 2.5% national growth in 2019 alone, with an 18% rise over the next five years.