The 29th of March 2019 is Britain’s cut-off date for leaving the EU. This means that as a country we are facing an uncertain future in some of our biggest markets – chief of which is property.
First time buyers are up against a plethora of unknown variables when entering the property market. Making matters worse is our murky Brexit future. Without any clear indication as to what may happen to the market, many are asking: ‘is now a good time to buy?’
What’s happened so far?
We have seen varying shifts in house prices throughout the UK, without any real trend setting in. This is making it harder and harder for experts to foresee what may happen to the market in the coming months. The average house price nationwide grew 3 per cent in the past year, which is down 8 per cent on the year prior to the referendum.
London suffered the worst. Pre-referendum, London was enjoying a 12 per cent growth in house prices annually. In the past year ending in May house price growth was just 0.4 per cent, dragging down the UK-wide average.
Should you buy?
The clear advantage for any first time buyer is the opportunity to grab properties at lower prices. As the market slows, agents and property owners may be more likely to sell lower than their initial asking price. What’s more, first time buyers looking at properties under £300,000 can enjoy a waiver on stamp duty and land tax, totalling savings of up to £5,000 on their initial deposit.
Should you sell?
Selling property in these climates is a different matter. Some experts predict that brexit could create a buyers market, making them more plentiful and bolder in their negotiations. Henry Pryor – ‘The BBC’s favourite property expert’ seems to believe that the selling market is getting harder, and brexit will only compound this difficulty: ‘According to estate agents themselves the average estate agency branch had 309 buyers registered last, 40 homes for sale & sold just 8! They admit that 86% sold for less than the asking price. If you put your house on the market today then statistically you have a 13% chance of selling it in the next month and just a 45% chance if you leave it on the market for the next year. That’s how hard this market is.’
What could the future hold?
Michael Patterson of We Buy Any House believes that the future is shaky, and in uncertain times the property market is often hit the hardest: ‘both domestic buyers and the significant interest fuelled by overseas buyers would potentially dry up within a very short space of time whilst the market tries to readjust to a unknown position that has no previous parallels. We can expect significant confusion and history tells us that at times like these the property sector is the one that takes the biggest hit’.
All clues are pointing towards UK house price growth slowing in the next five years. The market has always been influenced primarily by two things; interest rates and wages. The growth of the latter is expected to be dampened by Brexit and as a result, push the housing market towards a relative stagnation.