At the end of March 2017, Britain officially began the Brexit process. Prime Minister Theresa May triggered Article 50 which initiated the formal two-year countdown before the United Kingdom leaves the European Union; for better or worse. However, what does this mean for homeowners and first-time buyers who are trying to get on the property ladder?
According to the Royal Institution of Chartered Surveyors, the property market has slowed down because of the uncertainty surrounding Brexit. The number of houses available on the market is at an all-time low and this is set to continue. Indeed, Savills have estimated that the number of homes sold in 2018 will fall by 16%.
Nevertheless, industry leaders and experts across the country do not believe that Brexit will have a significant impact on the property market. They maintain that the biggest problem in housing remains supply and demand. Estimates put the figure of homes that need to be built each year to meet demand at approximately 275,000. On average, the actual figure of new homes is 160,000 per year.
The housing white paper, which was released at the beginning of the year, stressed that “this country doesn’t have enough homes. That’s not a personal opinion or a political calculation. It’s a simple statement of fact”.
It is impossible to make a long-term forecast but it could be argued that the impact of Brexit on the property market depends on its impact upon the UK economy generally. If investment stalls, the economy is likely to weaken and in this scenario, the residential property market will suffer. Only time will tell.
