4½ years after the vote by the public to leave the European Union, the deal of Brexit came to effect on January 1, 2021. Here is how it will likely impact the housing market in the United Kingdom.
After negotiating for months, the European Union and the United Kingdom agreed to the Brexit deal on December 24. This outlined the trade agreement including the ongoing European involvement level. This deal became effective on January 1 as there was an end in the withdrawal agreement. Since the European Union referendum, there has been uncertainty at many sectors’ forefront. Having dealt with economic and political uncertainty recently, the housing market in the United Kingdom greatly stayed resilient. There’s been a continuation of this even throughout this COVID-19 pandemic.
There’s a Less Likelihood of the Prices of Houses being Impacted in the Short Period
It isn’t easy to mine precisely how the United Kingdom housing market will be impacted by Brexit. Nevertheless, with an available deal, several feel there’s a less likelihood of Brexit having much impact in the sector in a short period. The prices of houses may be more impacted by job uncertainty and the economic recovery of the country from the pandemic. If there’s a significant job loss as a result of Brexit, this will likely result in a slight decline in the prices of houses. Several that deal in property are already predicting the growth in prices of houses to slow down this year, but a couple feels prices won’t fall, or at least not too much. If the growth in house price slows down, it will just likely be the best time for one to invest in property.
What’s Going to Happen with Demand in the Housing Market?
According to a “This is Money” article, the decision of several homebuyers to buy property is based on mortgage availability and employment rates. The interest rates of the mortgage have been at a significant low because of the pandemic. Some even forecast that the Bank of England will likely reduce the unease intro rate to the negative area. There’s a hike in the number of mortgage products you’ll find around as lenders are more confident, making it seamless for property investors and homebuyers to secure mortgages for the purchase of a property.
Looking at the stamp duty holiday that’s till March 31, demand in the United Kingdom housing market will stay strong at the beginning of this year. And the way homebuyers have reassessed the priorities of their home as a result of the pandemic, one of the highest of several individuals’ agenda will likely be moving home even after the end of the stamp duty holidays. Uncertainty of jobs that may result in more people renting for longer will likely have an impact that’s more significant on the housing market compared to Brexit. At the end of April, the furlough scheme will end. This is the period several predict that the level of unemployment will be at its peak.
The Market could Continue Moving as a Result of Renewed Confidence
There’s renewed confidence with the approval of 2 coronavirus vaccines in the United Kingdom. As the availability of more vaccines emerges, consumer confidence will likely regain in the housing market and wider economy. That’ll keep the market in motion. And moving on, fewer individuals may make use of Brexit as a reason for not investing in property.