Brexit and the UK property market - things to know
Brexit, it's been ongoing since 2016 - do we understand it? Probably not. As far as many of us are concerned, whether we opted to leave or not, Brexit negotiations are anyone's guess. Especially with a new Prime minister about to enter the fold.
One thing we may know a little about when it comes to the Brexit outcome is the potential effect it'll have on the housing sector. The uncertainty around Brexit has been dubbed the 'biggest problem' to the property market.
If you're a buyer or a seller, knowing all about the market now is key, it's also important if you're a landlord, whether you have landlord insurance or not, which you can get from HomeLet.
Below, we outline the things you need to know about the property market in the UK when it comes to Brexit.
The pound
The first thing we need to look at is the effect Brexit will have on the British Pound.
As we know, the day following the referendum, the value of sterling dropped by more than 10%, the biggest fall in a single day since World War Two.
This has been up and down since, but it has yet to return to the strength that it had before the referendum. Many experts think it'll never return to the pre-Brexit strength again, and the value of it, whether it goes up or down again will all depend upon the type of Brexit outcome we have.
UK prices
This has already begun to affect the property market, with houses tumbling across the nation, with 2018 reporting that prices were trending at their lowest in five years.
In August 2018, Which? reported that the highest average house price on their chart was £231,936, but then fell month on month until April 2019, when they slightly improved from £226,798 to £228,903.
However, trends show that property prices regularly increase in April.
Which? also reported that property prices across the nation had been gradually decreasing, with England and Scotland seeing 1.13% and 1.62% growth respectively. Only Wales noticed an increase, rising 6.7% in April 2019 compared to 4.3% in June 2018.
European prices
When it comes to other countries, it appears property prices may increase – but only in cities.
However, for those looking to leave the UK and move to a European country, such as Spain, the prices will be significantly more for you. For example, those purchasing a buy-to-let rental in Spain will have to pay 19% tax as an EU national. However, this increases to 24% for non-EU nationals – quite the price hike.
Overall, it would appear that outside of Wales, where the prices aren't as costly as England, housing prices aren't fairing too well. With their future hanging on the type of Brexit we get, things could get much worse if the pound suffers another huge decrease in value.