Articles From the Team
Brexit and buying a house
The economic uncertainty caused by Brexit has certainly affected the property market.
The Supreme Court ruled that the suspension of parliament by Prime Minister Boris Johnson was unlawful. Parliament has passed a law requiring the PM to ask the EU for an extension, but Mr Johnson has committed to leaving on 31 October: ‘do or die.’
Which? has analysed market activity before and since the Brexit referendum and spoken to experts from the estate agency, building, mortgage and buy-to-let sectors to give people an idea of what could happen over the coming months.
What will a no-deal Brexit mean for house prices?
A no-deal Brexit remains the default if the UK and EU don’t reach an agreement. Accountancy firm KPMG predicts a drop in house prices by around 6% following a no-deal Brexit, or 20% in a worst-case scenario.
Since the Brexit vote, August 2018 saw the highest average house price at £231,775 but prices dropped every month after that until April 2019. Is the house price slowdown an overdue market correction? If so, this may help first-time buyers who’ve been unable to get on to the property ladder recently.
The number of property sales in any given month is something to consider as a drop in sales can indicate market uncertainty. Latest data from HMRC shows a drop of 12% in the number of residential transactions in July 2019 (86,630). This is the lowest number of property sales since April 2016, when the 3% buy-to-let stamp duty surcharge was introduced. Sellers are reluctant to move at the moment given the uncertainty but should we be waiting until after Brexit to make move?
In January, the average time for a property to go under offer was up to its record high of 77 days but this dropped to 62 days in June and remained level in July and August. In estate agents, stock per branch was slightly up from 52 in August 2018 to 54 in August 2019. This could be indicative of seller frustration, with data agency TwentyCi pointing to 895,000 homes having been withdrawn from the market over the past year.
The low value of the pound could result in an influx in overseas investment. Changes to immigration policy could reduce demand from those coming to the UK, or drive up interest from those taking advantage of new arrangements with states outside the EU.
The new-build market has remained relatively strong in recent months and a record high number of planning permissions have been granted as part of the Help to Buy extension.
What do I do going forward?
If you have chosen to make the move, ‘Don’t just jump into a fixed rate’ says David Blake, Which? mortgage expert. Recent price drops in some regions mean that it’s becoming more of a buyers’ market, so you might be able to get a good deal. Also, buying a property should generally be regarded as a long-term investment and, even if there is a short-term price drop, house prices will probably stabilise in the future.
‘If you’ve found your ‘forever’ home and you’re looking at a long term move, buy now’ Kate Faulkner, housing expert and founder of propertychecklists.co.uk, says. Again, even if a property did drop in value in the short term, the market would probably have corrected itself by the time you wanted to move (assuming you stayed there for at least five years).
Ultimately, your decision to move house should be based on whether the time is right for you, your family and your personal financial circumstances.
Bearing Brexit in mind is a sensible approach but the most important thing is securing high quality legal and financial advice tailored to your circumstances.
There is still a shortage of experienced conveyancers in the North West market with a variety of firms looking to recruit. If you would like a confidential chat about North West based Conveyancing opportunities, please feel free to call Nicola O’Hanlon on 0161 819 7465.