Regardless of your political stance when it comes to Brexit, there is no escaping the fact that Brexit-induced uncertainty over the past 3.5 years, has had an impact on the social, political and economic environment across the UK.
Although the UK has now officially left the EU, Brexit is far from complete and as negotiations continue, there are potential lingering effects which are yet to be felt.
Direct impacts on the housing market
The economic uncertainty caused by Brexit over the past few years has resulted in some issues for the UK housing market, with sales dropping and housing prices falling in certain areas of the UK throughout 2019.
However, according to recent figures from BETA UK House Price Index, it appears that since December 2019, average house prices in the UK have risen by 2.2% compared to the previous year – reaching £234,742.
This is good news for property developers, as it shows there is still an affluent market for buy to sell properties and it may be true that the issues in the housing market caused by Brexit ‘uncertainty’ are in fact past the worst stage.
What is the market really like for sellers?
Two commonly used ways to measure market performance for sellers are:
- Stock per branch: What is the average number of properties on the estate agents’ books?
- Time: How long is a house on the market before it is purchased?
- More – Housing Market: Key Economic Indicators
Figures have shown that since the threat of Brexit has been looming, it has taken sellers a longer time to finalise the sale of their home than in previous years.
Now that Brexit has actually gone through, we must now wait for more updated figures to evaluate how things have changed.
However, stocks per branch have increased slightly year-on-year, moving from 46 properties per estate agent in December 2018 to 47 in December 2019.
So what does all of this mean for buy-to-let landlords?
Despite the instability of the past few years, the current political-economic climate does, in fact, lend to a healthy, lucrative market for buy-to-let landlords.
One of the main issues for landlords currently is their responsibility of considering the status of non-UK and EU citizens who are either renting at present or want to rent from them in the future.
Landlords may find themselves in a difficult position and could favour UK born residents since this can guarantee more security long term while we wait to see the effects of Brexit on immigration.
Most landlords are hopeful that the elected Tory government will take action and deliver on their pre-election promise to strengthen landlords’ rights of possession by reforming the law courts.
Currently, the situation remains uncertain, and changes to immigration policy could, in fact, reduce demand from non-UK residents, or alternatively drive up interest as a result of new arrangements with non-EU states.
Those with pre-established well-capitalised portfolios would benefit from this.
Additionally, with the new government Help to Buy scheme, there are more first-time buyers ready to get onto the property ladder and therefore a higher demand for new build homes.
To conclude, the property market appears to be gaining back some momentum and property developers need not shy away from continuing with planned projects in light of Brexit. More.
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