What does brexit mean for the London housing market?
The Easter holidays and the enforced suspension of London Parliamentary business gave us all a welcome break from the wall-to-wall coverage of the ongoing Brexit saga – but with return of MPs to Westminster came the return of the uncertainty that has dogged the process for much of the past year.
Lack of certainty is always unsettling and is always more likely to provoke stagnation than it is growth. When questions arise over the future of a football club’s manager or its star player, the history books suggest form dips and nervousness prevails until the situation is resolved.
The same is true in politics, and the unsettling effect of the protracted Brexit talks across all sectors from business to leisure and travel to finance has been well-documented as ‘business as usual’ has spiralled into a holding pattern while we wait for some clarity.
The same is true in the housing market. Latest analysis from Which? suggests that house price growth has declined slightly since a period of stagnation immediately after the Referendum. Transactions, though, were slightly up in February of this year than in 2018.
Somewhat simplistically, what that means is that right now housing is a buyer’s market, with the increase in transactions suggesting there’s a level of opportunism at play in a falling market.
To what extent, though, can the state of the UK property market in 2019 be attributed to the uncertainty created by Brexit? The answer is undoubtedly that it has played a part.
Many property professionals and market commentators, including the Royal Institute of Chartered Surveyors, believe the ongoing deadlock in Parliament is dragging the housing market into a slump, but there are also those who believe some of the trends we’re seeing are a product of the market undergoing a long overdue correction.
If true, then that could have the beneficial side-effect of serving to make property ownership more accessible to first time buyers – something that has been a concern to many people for some time.
It’s certainly true that many people are playing a ‘wait and see’ game and it’s likely that this is more to do with the terms of our departure – in other words, whether Britain leaves Europe with or without a deal – and how interest rates might be affected by that.
The Bank of England Governor, Mark Carney, has previously warned that a no-deal Brexit will have a significant negative impact on the UK economy, so it’s hardly surprising that potential house buyers might be cautious about taking the plunge until there’s confidence around the stability of interest rates.
But that’s not to say there aren’t deals to be had in the market or that buying a house would necessarily be a rash move at this stage.
Clearly, affordability looks different for everyone and regardless of the political climate we’d always advise would-be buyers to consider carefully the potential consequences of what is, for most people, the most expensive purchase they’ll ever make.
But for those who do enjoy the confidence of being able to buy, there are some good fixed rate mortgage deals out there – many of them for 5 years or longer – which would offer some insulation against any initial rise in interest rates as a result of leaving the EU.
It’s hard to imagine that anyone would argue the Brexit process has been a good thing, but although it’s left a mark on the housing market, there are still good deals to be done for many people who are looking to move.
If you’re one of them, why not come and talk to us about how our award-winning mortgage advice could help to see you into your dream home this summer?
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To find out more about our friendly and professional mortgage service, fees and what we can do to help make sure you’re not paying over the odds for your mortgage, why not visit www.oportfolio.co.uk or give us a call on 020 7371 5063.
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