Brexit Could See Fall in House Prices
With most opinion polls suggesting that the nation is split ahead of the UK referendum on membership of the European Union, estate agents have claimed that a vote to leave could result in house values falling by thousands of pounds.
A report, jointly commissioned by the National Association of Estate Agents and the Association of Residential Letting Agents, have claimed that Britain leaving the EU could result in a fall in both house values and rent prices.
The analysis suggested that house prices in London could fall by as much as £7,500, while prices across the rest of the UK could drop by £2,300
Affecting the Whole Market
The research – which was carried out by the Centre for Economics and Business Research (CEBR) – highlighted that a vote for Brexit would affect the entire housing market, as the total value of UK housing could fall by as much as £26.5bn by 2018.
Meanwhile, in the rental market it is claimed that the affect would be minimal for the first two or three years, however once demand begins to slow down rents could fall – which could see landlords sell their rental properties.
Lisa Gibbs, Partner and Conveyancing Manager in the Manchester office of Simpson Millar
, said that the UK housing market is already in a state of change:“With Help to Buy ISAs accelerating rapidly and an increase in new to the market 2 bed properties, it is an interesting time in the UK housing market.“The figures from this report highlight the precarious nature of house prices in the UK at present and whether this is good news or not will depend on an individual’s place in the market.“First time buyers will probably welcome a much-needed fall in house prices, but homeowners could see themselves drastically out of pocket if the value of their house falls by thousands of pounds over the next few years.”
The report based its claims on the fact that a vote to leave the EU could see a restriction on free movement of labour to the UK, which could result in demand for properties falling.
However, there is a warning contained in the report’s message, as a vote to leave could see pressures on the building of new homes increase – due to a shortage of construction workers.
Speaking of the need for new homes to be built, Lisa commented that: “With the various Government schemes set up for home buyers, new build properties are becoming an attractive first and second step on the property ladder.“We have seen an increase in the number of new build Help to Buy shared equity scheme instructions from clients, as the scheme has proved attractive for home buyers - particularly in the South East."
Advice on Market Changes
In an ever-changing market it can be difficult to know where you stand, when’s the best time to buy or sell? What’s the process of buying your first home? How can I decipher home buying jargon to get straight to the important points?The conveyancing team at Simpson Millar are experts in dealing with the property market and can help you navigate the often confusing subject with confidence and clarity.