In less than two months, the March 29 deadline for reaching the United Kingdom’s place in the European Union could finally end with a critical decision of leaving the union. A resulting two-year transition period is provided which allows different industries to deal with adhering to new tax rates and business regulations, but the current situation of uncertainty has led sectors such as the property market to a dangerous standstill.
Impact on prices nationwide
Though certain areas nationwide are seeing some signs of life such as in Wales and Northern Ireland, the most significant effect is obviously within the capital of London. Prospective investors are looking at the current crisis of the political unrest as a potential shift in the real estate market to turn into a buyer’s instead of a seller’s market. Selling properties at their current prices while the future of the UK is still shaky might not be the best option for current owners. With house prices at their lowest, the opportunity for reselling in the future is a potential gold mine for the brave.
The current state of the property market
As stated by Tarrant Parsons of the Royal Institutes of Chartered Surveyors, a no-deal result for Brexit could do more damage than the actual separation of the UK from the EU. The problematic nature of the housing market now is that the political waters are shaky and unpredictable. Investors’ patience and trust in the market might die down if a decision, whether a loss or a victory for the proposal, isn’t made soon. The negative implications of a ‘maybe’ which prolongs business and political negotiations could tire industries and investors out of the market.
Real estate consultants are at each other’s throats looking for every little bit of information uncovered that could dictate the retail prices of properties in the future. Consultants that have skillsets ahead of the curve such as Gerald Eve’s property sectors make them optimal second opinions regarding the affairs in the city. Whichever the case, the political divide of a NO-deal could result in drastic shifts in industries both local and international.
The potential outcome
An apparent slowing down of the market will be in effect regardless of whether or not the UK decides to stay or to go. It can also be expected that there won’t be a sudden crash in the market as the real estate industry takes a long time in dealing with political shifts compared to the stock market.
The soft blow to the housing market could prove to be a fatal blow for banks and mortgages. Mortgage rates as of now are at their lowest, and potential homebuyers are advised to make the most of the low prices now since mortgage rates might grow substantially once an actual decision is made. Banks may be less willing to lend money once Brexit comes into effect and concrete predictions can be made about the market during the two-year transition period out of the European Union.