FEBRUARY 26, 2019 | BY A & S Property
What impact will Brexit have on property prices?
With just five weeks until the UK is set to leave the EU, the impact of leaving the bloc without a deal continues to divide property commentators.
While some view the EU as a failing economic model, ensuring that the UK will thrive outside the EU with no-deal, others fear that a no-deal Brexit could trigger a deep and damaging recession with worse consequences for the UK economy than the 2008 financial crisis, as warned by the Bank of England last year.
The central bank fears said last September that failure to reach a deal with Brussels – with no transition period to a new trading relationship – could spark an immediate economic crash, with GDP falling by up to 8% next year, the unemployment rate increasing to about 7.5%, interest rates surging to 6.5%, and property prices crashing by up to 30%.
But new research suggests that the Bank’s prediction in the event of a disorderly Brexit is unlikely to happen.
Stretched affordability and uncertainty over the Brexit negotiations has undoubtedly hit the housing market over the past 12 months, and 41% of people surveyed expect this trend to continue, but they believe that a slowdown in the number of property sales is likely to cause average property prices to stagnate over the next three years, rather than fall.
The research, undertaken by home moving company AnyVan.com, found that many prospective buyers are waiting for the dust to settle as far as Brexit is concerned, but there are many still expecting home values to increase this year.
Some 20% of respondents are hoping for property prices to increase over the next 12 months with this growing to over a quarter - 27% - next year and a third - 32% - for 2020.
In London, the weak pound might have pushed international buyers in prime central London to its highest level for six years but for the majority of Londoners, they are predicting very uncertain times ahead for the value of their home.
Some 40% of homeowners in the capital do not expect to see any property price increases in the next three years. However, a third - 31% - predict that property values in London will rise in 2020 and 2021.
Elsewhere in the UK, Scottish and Welsh residents predict tough times ahead for property values.
More than half - 53% - of people in Wales do not expect to see values increase in the next three years with over a quarter still expecting prices to fall in 2021.
In Scotland, 32% of people expect a decrease in values this year with 29% in 2020 and 22% in 2021.
Leeds (29%), Bristol (24%) and Newcastle (27%) have the biggest share of homeowners, in percentage terms, predicting increases next year with 35% of people in Birmingham and 34% in Southampton forecasting that prices will rise when we hit the year 2021.
Angus Elphinstone, CEO of AnyVan.com, said: “Our latest property research gives a good indicator of the sentiment of British homeowners.
“While there have been recent statistics about the slowdown of property transactions and areas experiencing falling values, it seems the country is still split on their view on property price growth in the years to come.
“Things will become a lot clearer once we leave Europe, but with 41% of the nation not expecting property price increases in the next three years, it’s clear to see Theresa May and her government have a lot of work to do.”
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