Property experts say that the property market has experienced a lot of disruption, and it isn’t all due to Brexit. Based on previous market trends and what has been happening due to Brexit uncertainties, property experts say that at least the first quarter of 2019 will be a slow time for the housing sector.
A recent vote in favour of delaying the Brexit deadline to the end of June is being considered by the EU leaders (Source). This extension, if granted, will mean that the uncertain state of the nation will continue to be the norm till June ending, instead of midnight on the 29th of March, 2019. While the final decision concerning the UK’s withdrawal from the EU is still hanging, there has been and will be a lot of tension in the country leading up to that date. Property investors have been biding their time, holding onto their purses as they wait to see which way the Brexit proceedings leans. Most are holding out for lower prices, waiting for good bargains on a property; which might actually happen, as it is expected that, even after the final decision has been made about Brexit, there will still be a lot to do before the UK economy stabilizes. There will be some renegotiations of trade deals and possibly another election, and general elections tend to be tough on the property sector.
If the UK gets a ‘no-deal Brexit’, the worst case scenario is that property transactions will decrease, because the decisions to buy or sell property are typically guided by the political and economic state of a country. The political and economic stability of the UK will greatly affect the sale of property in central London, for instance.
However, Brexit isn’t the only thing that is making for the subdued predictions in the property market in 2019. The 2008 global financial crisis was the ultimate setup for the failure of the housing market in the UK, and the subsequent lethargic pace of economic recovery made the property market crash worse. Despite all this, property prices were able to rise by 2010, and between 2010 and 2014, the property market experienced a great boost, led by properties in prime central London. Then there were tax changes, two successive general elections, job uncertainties caused by Brexit, the EU referendum, and stretched affordability triggered a fall in property prices in central London, and this has caused concern for the property market sector. Also affecting the property industry is the lack of credit and Help to Buy for first-time investors, which have actually worked to cushion the price falls in the property market because what is available can only be bought by the wealthy.
The property market in 2018 was described as ‘subdued’ by property experts, and they predict that 2019 will be more of the same. There are still differing views about the housing market in 2019, and here are a few predictions by property experts in the UK:
- Housing market commentator Henry Pryor predicts a 5% fall in housing prices for 2019.
- Property market analyst for Hometrack, Richard Donnell, predicts a 3% rise.
- Miles Shipside of Rightmove predicts there will be no change in house prices.
- Simon Rubinsohn of the Royal Institution of Chartered Surveyors also predicted no change in house prices.
These experts made these predictions based on an average for house prices in the UK, but they also admit that these predictions could be different in various parts of the country, as well as in different neighbourhoods in the same town or city. These predictions are also subject to change due to the outcome of Brexit, so nothing is set in stone.
The experts’ predictions for housing prices in 2018 were quite accurate, which means that these predictions may hold true for 2019, as far as when the final decision on Brexit is taken.
These are opinions of Zisk Properties and are not to be considered as any form of advice including investment advice.