The Brexit Effect on Property Prices
We don’t know when we will leave the EU, we don’t know if we definitely will leave, and if we do leave, we don’t know whether we will leave with a deal or no deal. It seems there is uncertainty on top of uncertainty.
With Teresa May unable to pass her exit plan through parliament for the third attempt, she is now handing over the reigns to somebody else who can attempt to pass their bill. Under Teresa May it never seemed the No Deal was an option, that might not be the case for the new Prime Minister. Nobody can predict the future of the country, but we can predict if we come out of the EU things will change. New laws and regulations will be created, new trade deals with the EU and potentially new trade deals with other countries.
So let’s assume we have left the EU, what does this mean for UK businesses? Some businesses and industries will stay the same, some will seize the opportunities that arise, whereas some will suffer the consequences.
This maybe due to business owners relocating to EU destinations to carry on trading, owners selling their businesses, or companies going out of business altogether. For those businesses that will suffer there will be the inevitable sale of assets, one of which will be property. This will lead to more commercial buildings becoming available and the unfortunate loss of jobs. Redundancies may mean the workers are unable to find similar paying employment which could result in their homes being sold due to the strain on income. This is the reality of businesses closing.
What does this mean for the UK property prices? When there is less of a demand for property the prices fall. There are an increasing number of business owners and landlords who feel now is time to sell. This is due to current property prices being relatively high and demand relatively strong. After Brexit we are entering the unknown and the general consensus is we are in for a few turbulent years.
With any change people don’t want to be left behind. They don’t want to be left with an unsold property once everyone else has sold theirs. These movements have a snowball effect. We are seeing an increasing number of landlords at the moment deciding to sell properties, this is since the government removed the tax relief on mortgage interest payments. The savvy London landlords sold their properties 2 years ago at the peak. During the last recession there was a ripple effect from London of decreasing house prices through to the rest of the country. It seems landlords in other areas of the country have remembered this and many are following suit.
The obvious message from the government is don’t panic. But if you are thinking of selling that investment property, maybe now is probably a better time than post Brexit.