At the time of writing, Brexit is not affecting house prices as much as you may think. There was a slight pause in the market in 2016 when the referendum took place, but for now, things seem relatively stable.
The closer the UK’s departure from the EU becomes, the more worried estate agents are. Concern for house prices seemed to be concentrated in London, although the outlook for house prices in a year’s time seems to be quite low.
A Reduction of 35%
The governor of the Bank of England stated that he thought a no-deal Brexit would see house prices being reduced by as much as 35%. However, the effects of Brexit on mortgages and house prices will ultimately depend on the deal Theresa May’s government walks away with, and any repercussions the deal has on the economy.
While some estate agents claim that London is the only city that has seen a concern for house prices, the city of Aberdeen has seen a 10% fall in house prices since June 2016. Prices elsewhere in the country have continued to grow, by as much as 15% in some areas.
The number of homes sold in London is down 20% year-on-year, and prices in London fell by 0.7% in recent years. Prices do continue to be on the rise in other parts of the UK. Trends such as these are apparently due to a lower number of people investing in property and a lack of affordability in some of the country’s more expensive markets.
Left with Uncertainty
The impact of Brexit has left the real estate world with a lot of uncertainty, although the effects so far has been pretty minimal. With slower house price growth in London, due to the financial commitment that comes with investing in a home in the capital, it looks as though the rest of the country remains somewhat unaffected for now.
Time will tell how Brexit will affect house prices once the country leaves the EU, but for now, estate agents, buy-to-let investors and those wanting their own home can have some confidence that overall UK house prices are remaining pretty stable.