Following June’s EU referendum, the decision was made to leave the European Union. Millions of people turned out to vote on whether we should remain or stay in the EU. ‘Brexit’ (short for British exit) is confirmed, and now the dust from this decision has cleared, things still aren’t much clearer. There still hasn’t been a date announced for Great Britain’s departure, or how exactly this will affect relationships with other European countries, and policies themselves, but many financial experts have given their opinion on such matters.
Housing and you
Before the referendum, there was a lot of speculation being thrown around about how leaving would affect the UK’s economy, and specifically the housing market. Some said house prices would fall, some said they would remain the same, and some said that prices would in fact rise. Now we know that the decision has been made to leave, there are still a lot of conflicting opinions.
Will they drop?
The British Treasury has predicted that house prices may fall by up to 18% over the next two years, thanks to the ‘economic shock’ increasing the cost of mortgages. Furthermore, some property experts believe that there may be a freeze in new building, and a lot of potential sellers will stay put.
A lot of this worry and uncertainty stems from the ambiguous status of Great Britain. We know now that we will be leaving the UK, but when, and how? Theresa May will not trigger Article 50 until next year, which will start up to two years of EU exit talks. Jonathan Hopper, managing director of the buying agents Garrington Property Finders, claims that ‘the prolonged period of uncertainty will prove more toxic’ than leaving the EU itself.
However, is this just fear mongering? Andrea Leadsom, a Eurosceptic minister, dismissed the Treasury’s prediction of an 18% drop as an ‘extraordinary claim’, made by Remain supporters. Property website Rightmove also says that house prices are behaving normally for this time of year, casting more doubt on whether the Brexit decision has drastically affected housing prices.
Only time will tell
It has only been around two months since the vote was actually cast for Brexit, which is not long at all in the grand scheme of things. It’s entirely reasonable for people to be somewhat nervous about moving house in the current, tentative climate, but it is impossible to predict whether this trend will continue.
If exit talks continue for two years and leave potential sellers and buyers in the dark, then things may get worse, with people not sure whether they will be undercutting themselves. However, moving house can be a necessity for some people, and even if the market drops, there will still be a lot of houses being bought and sold every day.
Luckily, Brexit will not affect the infrastructure surrounding this, such as trustworthy estate agents, reliable and hardworking removal services, or painters and decorators, allowing you to move with confidence.