Despite the last few months of uncertainty caused by the EU referendum results. There are some clear signs of positivity in the UK property market.
1 . Early reports show minimal impact (and growth) from the EU referendum
The Royal Institution of Chartered Surveyors reported during August, 12% more respondents nationally reported an increase in prices, up from +5% in July. Suggesting to many that the fears over “brexit fallout” may have be overestimated.
“There are clear signs that the housing market is settling down after the initial surprise of the outcome to the EU referendum, …. It is likely the swift response from the Bank of England, both in terms of the lowering of the capital buffer and the cut in interest rates, has played a role in helping to support confidence.” Simon Rubisohn, chief economist at RICS
Other reports have shown property investment activity remains strong throughout the UK market. The report by Lambert Smith Hampton showed that regardless of any expectations of investment activity drastically slowing down in the second quarter of the year, there was a 42% uplift to £501 million. This compares to an investment of £353 million during the same period one year earlier.
Federation of Master Builders (FMB) has revealed that two-thirds of SME house builders are yet to see any negative impact on their project pipelines
2 . Foreign investment in UK property increasing demand
The recent fluctuation in the value of pound following the EU referendum has triggered a spending spree in the UK property market from foreign investors. Traditionally focused on Central London, overseas buyers are no longer just targeting prime central locations.
3. Housing shortage is the biggest challenge in UK
A shortage in UK housing is looks set to continue and with a rise in demand and shortage in supply. House prices are expected to rise over the next 12 months leaving many with no option to buy their own home.
A recent report by charity Shelter stated – “The average first-time-buyer in Greater Manchester will need to earn £44,000 a year by 2020, in order to take that first step in the property ladder. “
Additionally a representative of the Local Government Association said: “The shortage of houses in this country is a top concern for people who are finding that buying their first house is increasingly out of reach. If we are to stand any chance of solving our housing crisis, councils must be able to replace sold homes and reinvest in building more of the genuine affordable homes our communities desperately need now more than ever.”
With no clear solutions to the UK housing shortage, many people will be left paying a ‘living rent’ with little option to get on the property ladder. Making generation rent one of the few certainties in today’s property market.