Europe: What will Brexit mean for house prices?.
Whether you’re a staunch remainder or avid Brexiteer, there’s no denying that the UK’s impending exit from the EU is causing property market jitters. On Tuesday, the British Chambers of Commerce (BCC) put 20 questions about what Brexit will mean for UK companies to the government, claiming a no-deal Brexit would leave businesses ‘hung out to dry’. Theresa May is currently attempting to renegotiate the Brexit deal with a view to replacing the backstop, which would avoid a hard border in Ireland if the UK left without a deal. However, the EU has said it is unwilling to renter negotiations. So, what does all of this mean for house prices and the property market, and what impact has the vote to leave the EU already made?
Taking a long look back, house price growth plummeted following the referendum in June 2016; then in September 2018 Bank of England governor Mark Carney warned that a no-deal Brexit could send house prices tumbling by a third. Here, we analyse market activity before and since the Brexit referendum and give you the insider’s guide to what experts from the estate agency, building, mortgage and buy-to-let sectors think will happen over the coming months.
What’s happened to house prices since the Brexit vote? House prices did stagnate for a while following the referendum in June 2016, as you’ll see in the chart below. This could well have been down to the usual pattern of prices growing in spring and plateauing over summer, which we also saw in 2017. But, with Brexit looming ever closer, house prices suffered a bigger post-summer dip than usual in 2018, dropping from a peak of £232,797 in August to £230,630 in November. The latest ONS House Price Index shows that they crept up slightly in December, meaning that the current average UK house price is £230,776.
The estate agent: ‘Buyers and sellers are putting their plans on hold’ Mark Hayward, chief executive, NAEA Property mark says: ‘Brexit is undoubtedly causing uncertainty in the housing market, which in turn affects sentiment and decision-making – and last night’s vote added further uncertainty to an already uncertain marketplace. ‘With details of the final deal still unknown, we’re seeing both buyers and sellers putting their plans on hold. Once the details are clearer, we’ll have a degree of certainty which may trigger a flurry of activity.’