The UK property market should cope better with Brexit than the financial crash of 10 years ago, according to one new report, despite a recent dip in prices.
Analysis from estate agent Haart shows that while prices dropped by 1.4% in October, sales were up by 2.7% month on month and by 9.7. % on a year-on-year basis.
With exactly how Prime Minster Theresa May’s Brexit deal plays out still uncertain, Haart CEO Paul Smith believes that while the market is in better shape than before the credit crunch, there must be caution given the number of possibilities ahead.
“I believe that even if we encountered a hard Brexit, we would be very unlikely to see the significant price falls encountered during the credit crunch.”
“Greater regulation in the banking and mortgage market, a shortage of supply and Government support which underpins the first-time buyer market means that a far more likely outcome would be a reduction in transaction volumes.
“While this uncertainty would result in fewer homes coming to market, demand will continue to outstrip supply as at the end of the day people will always need to move home for various reasons, which will ensure that prices continue to hold up regardless of the outcome.”
No deal=slower market?
Leaving the EU with a good deal is predicted to give a 10% uplift in transactions in the second half of 2019. But leaving with no deal would result in a “…slower market, with fewer transactions taking place as both buyers and sellers hit the brakes on their plan.”
Should talks on the final shape of Brexit rumble on past 23:00 on 29 March next year, the effects on the property market could be serious, adds Mr Smith.
“Our latest data shows that house prices across England and Wales have fallen by 0.8% on the year, highlighting the adverse effect uncertainty continues to have on the housing market.
“Extending negotiations would only encourage further uncertainty, resulting in a delay among buyers and sellers. Should this continue throughout 2019, we could expect transaction volumes to dip by as much as 20%, further stunting any opportunity of economic prosperity at a time when we need it most.”