With the triggering of Article 50 earlier this week, it has finally become official: the UK is leaving the EU. The country’s property market, however, is not set to feel a lot of the change.
What Britain’s decision to leave the EU will do to its property market is a question that has been asked frequently. The simplest answer to the question possibly lies in what we’ve already seen, which isn’t a lot.
The impact of the Brexit vote last year was hardly noticeable when it comes to the property market. House prices have been rising constantly with only London being an exception to that rule.
So let’s have a closer look at the London market for a moment. London has seen a decrease in house prices and with that seems to have lost its Number One spot of ever growing desirability. But putting that purely down to Brexit would be a great mistake, especially considering the stamp duty changes came into effect only two months prior to the referendum.
And the argument that a change to tax regulations adding a rather substantial amount to an already rather large price tag will have a bigger impact on an investor’s decision than the possibility of a country leaving a political union is an easy one to make. Which means one may be better off explaining London’s dropping popularity with tax changes rather than political instability.
When it comes to the rest of the country, there’s one simple factor that, almost automatically, makes Brexit seem less important: the growing gap between supply and demand. Estimates suggest the country is in need of 174,000 new homes to be built every year to balance out the demand. A target, Britain is currently very far from reaching.
If anything, triggering Article 50 was the first step towards certainty after almost nine months of not knowing what will happen next. So whilst the next two years might be a bit of a bumpier ride, filled with hard negotiations and tough decisions, the long-term outlook for Britain’s property market is still one worth taking note of.