Last year Britain voted to become independent from the EU and so far very little has changed. However as of March 30th 2017 Article 50 of the Lisbon Treaty has been triggered so the two year exit process has just begun, so the effects of the decision will then become apparent. There were a lot of predictions before Brexit as to how it would affect the house market with scary predictions stating that house prices could plummet by 18%. When the votes were finalised and Brexit was confirmed there was an initial plummet however since then things have evened out.
It is though that once auctioned the economy of the UK is set to weaken initially which could also affect the property market. Due to the economy weakening it is thought that household finances are also set to feel pressure which could reduce the rise in house prices significantly. By 2019 however it is thought that there will be more economic growth which will allow people to gain in returns when they sell.
During 2017 the UK house prices are set to plateau, with London being affected most of all by a rapid slowing. In London the price of properties has always been higher than other like for like across the UK, which could mean that they are set to lose more by the rapid decline in property value increase. The changes in affordability could make it difficult for people to sell their homes. It is however thought that there will be more interest from overseas due to how weak the sterling is set to be against the dollar, however for it to be an incentive there will have to be more information putting the Brexit concerns to rest when it comes to the economy as a whole especially with the recent raise in taxes.
Although house prices are still set to rise, they are set to do so at a slower rate than they would have had Britain chose to remain in the EU due to the uncertainty of the future. It is though that developments within the economy are going to be the deciding factor as to how hard Britain is hit by the changes. Mortgage rates however are expected to be low which makes it a great time to buy but not the greatest to sell and capitalise on property investment. It is not yet known whether the rules as to who is and isn’t eligible for a mortgage will reduce the amount of people being able to obtain one.
Once the promised deal of still trading with the EU and the results are publicised the uncertainty surrounding how Brexit will affect house prices is yet to be determined. Once this information puts worries to rest (as will hopefully be the case) people will be more likely to see house prices increase as the economy improves after Brexit is formally put in place.