There is no doubt that Brexit is having an impact on the real estate market in the UK currently. As the situation stands at present, there is no certainty that the UK will leave the EU on the legal deadline of October 31st and if they do so, whether it will be a “no deal” Brexit. This has led to a decline in the market across the board, with residential and commercial being equally affected.
Inevitably, in a country that is so dominated by one major global city as the UK, London has experienced the largest decline, with some firms quoting an overall shrinkage of an average house price of nearly a third. Other areas of the UK have experienced downturns too, albeit in some areas this is much less, at 7-10%.
A major part of this is down to the general public is unwilling to buy or sell until the situation with the EU is resolved. Similarly, businesses, particularly those that operate in the EU, are waiting for a definitive decision on Brexit before they make any decisions with regards to real estate sales and purchases.
However, with a new Prime Minister at the helm in Boris Johnson, the UK government looks closer to leaving the EU than it has done previously, and this could spell positivity for some areas of the market in the rest of 2019. With favourable pricings, portfolio and cash buyers are able to find some excellent deals at the moment, and the indications are that the effects of Brexit may well be short term, meaning that those who are looking for long-term properties are better off buying now before the inevitable market settling that happens post-Brexit.
However, there is no certainty what will happen to prices short term, if Brexit goes ahead on October 31st. The two possibilities are that reduced investment from abroad following a tightening of trade and immigration laws will drive down prices even further. It is also possible that prices will go up as investors see real estate as a relatively safe investment long term.
So, what does this mean for those looking to invest right now? All the indicators are that if you can find a property and the finances, now is a good time to buy, as prices are low and there is no telling how the aftermath of Brexit will impact the real estate market. And as fluctuations in financial situations could be positive or negative, fixed-rate mortgages are currently unpopular with those who have sufficient capital. Ultimately though, it is now so close to the Brexit deadline that uncertainty rules – for now.