The UK economy appears to have weathered the initial shock of the Brexit vote earlier this year, but has confidence been fully restored in the property sector? Is it business as usual or are we still treading carefully?
Britain’s Vote Leave result immediately had an impact on housing market transactions, and many vendors delayed their decision to sell amidst the uncertainty. As expected, the property market nationwide has experienced a significant lull in the last few months, but according to RICS – the Royal Institute of Chartered Surveyors – it seems the housing market is ‘settling down’ after post-Brexit jitters.
Enquiries on the rise The institute’s September report found a significant turnaround in new buyer enquiries compared with June, with findings revealing demand from home-buyers had risen for the first time since February. This could, however, have been down to the fact that June, July and August are always quieter months due to the summer holidays.
While it appears that buyers are returning, the problem is that there is a significant lack of fresh housing stock on offer until vendors are satisfied that house price growth is at its peak – this is what’s keeping the prices high.
That being said, property group JLL has claimed that house price growth will be subdued and largely flat until 2019. The group has forecast 0.5% growth in 2017 and 1% in 2018, before rising to 2% in 2019. Ultimately, these predictions will depend greatly on the levels of new housing being delivered – a shortage of new homes, added to increasing demand in 2018, will help boost house prices.
Impact on landlords
So where does this leave Britain’s landlords? According to findings from a recent survey carried out by the National Landlord’s Association, more than a third of landlords (35%) think that leaving the EU will have a negative impact on their ability to attract tenants in the future. The findings also reveal that 39% believe that Brexit will have no significant impact on their business; 21% unsure and 5% believe it will have a positive impact.
Despite fears of a drop in demand and the imminent cuts to buy-to-let tax relief, a new survey has revealed it’s back to business for the majority of the UK’s landlords. According to a Landlord Voice survey conducted by Simple Landlords Insurance, 4 in 5 landlords are unphased by Britain’s decision to leave the EU and intend to continue investing in buy-to-let properties.
Only 9% claimed that the Brexit vote meant they would postpone their plans to expand their portfolio, while 3% said they were likely to invest even more. Jenny Mayes from Simple Landlords Insurance said: “While some landlords are adopting a cautious ‘wait and see’ approach and slowing down their investment, others see opportunity in the changes and the vast majority want to keep or grow their property investment.
“Landlords are reacting in different ways to political changes, but one thing they have in common is that most are refusing to let it negatively deter them. With many re-evaluating their objectives, changing their strategy, moving to limited company ownership or focusing on capital appreciation, they are ultimately continuing to invest.”
Ben says: “Since the referendum (and even for a month or so beforehand) the industry experienced a slowing down in the number of properties coming to market, as well as a halt in price increases. We have not seen prices reduce however. There are still uncertain times ahead as we navigate our exit from the EU, but the UK property market has shown itself to be resilient.”
If you’re unsure about renting, letting, buying or selling your property pre and post-Brexit, contact one of our Ben Siggins branches to get expert advice from one of our team members. We’re always on hand to help and provide advice where we can.
Matthew, our branch manager at Maidstone & Gillingham, explains his prediction for the UK property market in our latest Q & A session.