The fallout from Brexit has been marked by a string of bleak economic developments: the falling value of the pound; the freezing of commercial property trading by investment giants like M&G Investments in an effort to stem an exodus of investors; growing economic contraction that could potentially reverse 7 years of growth. However, despite this bombardment of seemingly bad news, Brexit need not be a disaster for those seeking to move along the property ladder
The fears of experts and many in the property market generally concern a fall in housing prices. However, the doubts and concerns these have raised may ensure negative projections become a self-fulfilling prophecy. Individuals pulling out of the market or waiting to see the impact of Brexit. This in turn causes disruptions in the property chain, producing stagnation and ultimately regression. Therefore, it could be the uncertainty Brexit has generated that could itself cause the contraction of the property market. The best way to offset a downturn in the property market may simply be to continue as normal. Attend viewings. Keep your home on the market. Sell or buy if favorable to you. Confidence in the market could be the best way to maintain it.
A pattern noticeable in the British property market in recent years has also been that it has become increasingly fragmented, forming numerous local markets, rather than a single national one. This means national averages showing falling property prices can be misleading and may not reflect trends within your local area. It is therefore vital to keep in touch with changes in local markets as the best indication of the impact Brexit has had on your locality. Unfavorable trends shown over national media may be at odds with your local patterns and bad times for one area may not equate to bad times for another.
With Britain’s exit from the EU only weeks old, it also remains largely a matter of conjecture the extent of its impact on housing prices. Therefore, take a proactive approach to see how property patterns in your areas are affected over the coming weeks. Do the rates at which properties are sold change and if so do they increase or decrease? Is there a marked increase in the number of properties reducing prices and by what amount? All of this can give an indication of how Brexit has affected the property market near you.
However, it is essential that buyers keep in mind the potential implications of a Brexit-induced rise in interest rates or economic downturn over coming years. Therefore, ensure you have budgeted for potential rises in mortgage fees in the future. Make sure you are in a position to hold your property in the face of an unforeseen change of circumstances such as loss of employment. Avoid a situation where a change in the economy may mean you are forced to sell later out of necessity rather than desire.