Brexit: How will the UK property market fare outside of the EU?
Now that the UK has voted to leave the EU, many are beginning to question the consequences for financial institutions, as well as the property market. So does Brexit spell doom for those looking to sell their homes?
The Leave-vs-Remain debate has been one the most divisive issues in modern British political history, with campaigners on both sides making various claims about the future. For the average Brit, it has been hard to see through the rhetoric and scaremongering that has developed over the course of the last few months – and it is hard to be sure whether some of these claims are true or simply baseless propaganda.
With the Brexit vote having passed, it is worrying to learn that the most searched term on Google within the UK the following day was “What is the EU?”, indicating that many UK residents were not entirely sure what they were voting for.
For many, the key issues were immigration, free trade and a more autonomous approach to funding – but with 17.5m homeowners in the UK, has the British public overlooked a potentially more catastrophic matter? For those within the property market who campaigned to remain, a great concern was the potential loss of value of the pound sterling – and the loss of value in homes – so are these fears righteous or unfounded?
Despite leaving the EU, many businesses in the UK will still wish to continue trading with mainland Europe, which means being a part of the single market. To ensure this happens, the country must remain a member of the European Economic Community (EEC) – and the rules of the EEC clearly dictate that we must allow for free movement of workers throughout Europe, as well as contribute financially to other members.
Essentially, as a country we will have to follow approximately 75% of EU regulations, while only contributing 6% less to the EU than before – but having left the EU, the UK has foregone its right to influence these regulations or their related legislation.
With the British pound dropping 10% of its value in the immediate aftermath of the Brexit vote, there has been plenty for the average homeowner to worry about. But as long as the UK remains a member of the EEC, economists believe there will be few long-term effects. In the short-term, those looking to sell their house fast may face a loss in value on their homes, but luckily there are property buying companies who will still offer competitive prices regardless of location or condition.
Various financial bodies can only guess at the possible fall in value of property. KPMG estimates a fall of 5%, compared with an appraisal of 18% by the treasury – but as with many aspects of the Brexit, the future is as yet unknown.
In a world where a country’s economy is largely buoyed by consumer confidence, potential buyers are less likely to purchase a home until the market has settled, leaving vendors in a position where a sale is likely to take much longer. For many, this is not an issue, but for those who need to move fast for the sake of their career or family, it’s useful to know that UK property buyers are willing to buy any house for cash in a much shorter timeframe.
So will Brexit destroy the UK economy and possibly that of the entire EU? It is unlikely; mainly because the dream many ‘leave’ voters had of becoming fully autonomous from Europe was never going to happen, due to the strong trade ties we have with countries such as Belgium, France and Germany. As long as the UK maintains its inclusion within the single market, many house buying experts believe that as the dust settles, most homeowners will find themselves unaffected by the Brexit vote in the longer term.
Worried the Brexit vote will affect your house’s value? Why not ask National Homebuyers for advice, as we buy any house. Call 08000 443 911 or request a call back to find out how much you could get for your property.