One question on everyone’s lips since Britain voted to leave the European Union back in 2016 is about whether house prices will collapse.
If we use the actions of traders as anything to go by, then we may well be in for a severe housing market slowdown. On the FTSE 100, developers have plummeted ,with giants such as Taylor Wimpey and Barratt Developments all taking a 20% hit.
During the referendum campaign it was highlighted that one of the consequences of voting to leave the EU would be a drop in house prices. The Treasury even said it expected a fall of ten to 18% if the public voted to leave.
What was seen as a negative outcome for some was seen as positive by others, with the Brexit side arguing that a fall in house prices would help the poor in addition to young first-time purchasers.
According to property consultant Richard Donnell, speaking in The Guardian, the impact of Brexit is likely result in buyers staying out of the market while they gauge what the financial markets will do in the short term. The resulting fall in turnover will lead to a rapid reduction in the growth of house prices.
He added that he expected to see more modest price reductions within the high-end market rather than 20% falls which had happened in the past as a result of financial downturns – a slowing-down as opposed to a reversal.
There are people who argue that there won’t be any reduction in property prices as a result of Brexit.
Peter Wetherell, who is a London-based estate agent specialising in luxury developments, said he believed that the vote Leave result would see foreign investors snapping up property thanks to a weaker pound. This would result in more work for property management firms and increased need for property inventory software like that provided by https://inventorybase.co.uk/
In fact, the country’s capital has actually seen an increase in buyers from the EU, with many foreign buyers saving a whopping £26,000 on average on property in London.
According to David Brown, who heads up the sales and letting estate agents Marsh & Parsons, there is still a huge amount of demand in the UK housing market and the leave vote won’t change that in the short term.