Brexit and house prices: many home owners are continuing to worry about the state of the property market following the Brexit vote and the continuing uncertainty about what kind of a deal we'll have when we do leave the European Union.
Although Boris Johnson's landslide victory in the recent General Election has spiked hopes of a 'Boris bounce' for the UK's housing market, property experts continue to predict a flat housing market constrained by a lack of supply of new properties. The latest housing forecast by Halifax predicts a two per cent growth countrywide – a better situation for sellers than in 2019, but hardly a surge.
Finding a good mortgage deal might be easier than ever historically, with interest rates remaining low, but sellers remain wary of what 2020 will hold in terms of Brexit negotiations and are holding off putting their properties up for sale.
Simultaneously, first-time buyers continue to be stymied by their inability to put together a deposit. Moreover, the number of rental properties coming onto the market has reduced too, which will mean higher prices for renters, with a three per cent rise predicted in London.
It is clear at this point that the government will need to come up with both short-term and long-term solutions to the housing crisis come the new year – not after Brexit, but as soon as possible.
Managing Director of Halifax Russell Galley points out that something must be done to increase housing affordability, regardless of the outcome of the Brexit negotiations, 'Prospects for 2020 look a bit brighter, with uncertainty in the economy falling back somewhat, transactions volumes anticipated to pick up and further price increases made possible by growth in households’ real incomes. However, the challenges faced by prospective buyers in raising the necessary deposits may continue to constrain demand.'
RICS also emphasise the need for the government to take housing reform seriously. Head of UK Government Relations & City Strategy Hew Edgar suggests that elevating the Housing Minister to Cabinet level would signal an appropriate level of commitment to fixing the housing crisis – a burning issue that continues to unfold alongside Brexit, 'For too long, domestic issues – particularly housing - have been side-lined by the Brexit debate, and this has negatively impacted investment and growth in land, property and construction.'
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