Market uncertainty in post-Brexit Britain could represent an opportunity for those looking to ascend a rung or two on the property ladder.
2018 was another year in which house prices surprised as all by remaining largely resilient, despite a challenging financial landscape in which there were more questions than answers. Brexit, of course, loomed large as an influencing factor over every aspect of the market, and property is no exception.
In 2019, the time for predictions and debate will draw to a close. Brexit is set in stone for 29th March, and while it seems certain to bring challenges to many sectors, it could also represent a boom time for those wanting to take out million pound mortgages and snap up a high end property at the best possible price.
Price outlook hits two year low
The UK property market has shown remarkable resilience over the various social and economic events of the last decade, that have hit other assets and investments so hard. The global recession, interest rates dropping to zero, even the EU referendum itself – property prices have experienced the occasional wobble, but broadly speaking, they have remained buoyant, whatever the economy has thrown at them. Similarly, few are expecting a tumultuous plunge in property prices on 01 April.
However, the warning issued by Bank of England governor Mark Carney towards the end of last year has got those with money tied up in property watching the Brexit drama unfold like a hawk. Carney hit the headlines with predictions that a no-deal Brexit could wipe more than a third off property prices. Most commentators consider his numbers to be exaggerated, but the biggest danger of headlines like these is that they can inject such a case of the jitters into a market that they become self-fulfilling prophesies.
What we know for certain is that as Brexit day draws closer, the price outlook is at its lowest since the EU referendum took place.
Just how close Mark Carney’s predictions will come to reality does not just depend on the nature of the Brexit deal. Location will also have a bearing, and it seems certain that some places will be more affected by Brexit than others.
In essence, this has turned what we conventionally know about house prices on its head. London and the South East struggled in 2018 and are the locations most likely to be hit by a Brexit bombshell. Locations to the north and in the midlands, on the other hand, saw continued steady growth, and any Brexit effect here is likely to be less dramatic, and also, more short-term in nature, a little like the blip in the commercial market that was seen over a short period after the results of the referendum were made public.
A buyer’s market
Even at this eleventh hour, there are more unknowns than knowns when it comes to Brexit. For buyers, however, the key points to keep in mind are that some drop in prices is almost inevitable, that this drop might be significant, particularly in London and the South East, and that the dip might only be a short-term one.
In other words, there will be bargains to be had, but buyers need to be at the ready to snap them up because they might not last for long.
Photo credit – richardharriscoaching.com