A topic that’s been discussed ever since Britain voted to leave the European Union almost two years ago and we’re still no further forward to a definite answer as to how Brexit will affect house prices. However, we can listen to what those in the property sphere ‘predict’ (although bear in mind none of them – as far as we can tell – have a crystal ball).
In the event of a ‘No Deal’ Brexit on March 29th (the official leaving date), the Governor of the Bank of England, Mark Carney, famously dropped a bomb shell on the property market when he predicted last Autumn that house prices could drop by 35 per cent. Certainly, there have been price drops in London and the South East over the past couple of years (although whether that’s because the market was over-inflated anyway remains to be seen).
House prices may drop slowly – but not drastically – says investor
One thing is for certain, if there is to be house price drops then – unlike the currency and stock market – it won’t be overnight, says Surrenden Invest’s Managing Director, Jonathan Stephens.
He does expect prices to drop, regardless of whether it’s a hard no-deal Brexit or a soft Brexit. That’s because he believes the value of the pound will go down either way and that will affect buyer confidence. This, he insists, will lead to a slow drop in house prices but that any ‘housing market crash’ is unlikely. In fact, foreign property investors may just save the day, he says, since the drop in the pound may encourage them to invest in the UK once more, buoying up the housing market.
House sales could increase says estate agent
Robert Butterworth, head of research at Estate Agents Jackson-Stops London believes housing transactions could actually go up, following ‘a reasonable’ Brexit. And so therefore, would prices. But then, he admits, the market isn’t exactly going like a fair at present so the bar isn’t currently that high anyhow. Certainly, though, he doesn’t predict the slowing down that Stephens does.
Evidence of a slow historic price drop
Historically house prices have been decreasing steadily over the past couple of years. Figures from the government’s Office for National Statistics show a monthly fall compared to the same period the previous year – to the extent they were down 0.31 per cent in October.
Fears of a housing crash ‘unfounded’ says analyst.
Property investor and analyst Kate Faulkner believes canny buyers are waiting for price falls post-Brexit. But it’s not a strategy she entirely approves of, since supply is also dropping – making a price fall more unlikely. She believes prices may drop in the short-term but provided new buyers hang in there ie don’t sell until at least five years later, they should get their money back – and more. In other words, like Stephens, she too believes a housing price crash is unlikely.
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