No deal Brexit could hit house prices

No deal Brexit could hit house prices

The political turmoil that Britain is currently experiencing and the negative tone used in much of the news can make it a struggle to see positive outcomes that might arise should the UK leave the EU without a deal on 31 October. Deal or no-deal the UK remains to be an attractive place to purchase investment property for a variety of reasons.

Where there is uncertainty property experts see opportunity for those savvy buyers willing to make a well informed decision at a time when others might be holding back. Accountants KPMG recently released a report that indicates the effects of a no-deal Brexit are unlikely to be as catastrophic as some parties are trying to indicate.

Property price growth

Property prices across the UK have generally seen slower price growth in the years following the result of the referendum in 2016. However a recent report from accountants KPMG noted that the UK housing market is generally much healthier than it was at the time of the crash In 2008 when prices fell by 15%.

In parts of the country property prices have stagnated or fallen marginally since 2016, the KPMG report states that, with the exception of London and Northern Ireland, which have both seen a fall in price growth this year, most regions will see changes of less than 2% in 2019, but increases nonetheless.

The report continues on to state that they believe all regions will see property prices increase next year aside from a very small slide of 0.2% in London’s property price growth.

The predicted figures are far from dramatic and provide a continued indication that despite political uncertainty the UK property market is largely unmoved and continues to be a good prospect for investors, both domestic and international.

Demand continues to outstrip supply

The KPMG report continues to say that whilst a no-deal Brexit might affect prices in the short term it will only have a limited impact due to “the fundamental factors driving the market: the stock of regional housing.”

There are locations that are supported by solid economic growth that have seen continued, and in many cases, a growing demand for housing.

Generally, demand for homes is greater than the supply to the market across the UK which is supporting continued price growth in most locations.

Furthermore, in this period which has an uncertain economic outlook housebuilders are expected to reduce the supply of housing in some regions.

The accountants concluded that “while there will be fallout from the initial economic shock following a no-deal Brexit, the market is expected to recover most ground in the long run”

Strong rental market

Whilst many are put off buying property at present or simply can’t afford to do so rental demand across the UK is strong and is showing little sign of slowing down.

Mortgages are relatively cheap for buyers and Stamp Duty Land Tax has been eradicated for first time buyers, all factors that should encourage activity in the market and have done so to a certain extent. The reality is that many first time buyers are not able to raise the vast deposits needed to buy a property and instead are renting, presenting an excellent opportunity for investors.

To read our recent article on Generation Rent – click here.

Buying the right property

For investors, ensuring a property is purchased at the right price and that it has good capital growth prospects are key considerations, buying a property that will see strong interest from potential tenants and provide a good yield are equally important factors.

Get in touch

It is especially important to be prudent in these times of uncertainty, our team of experts can ensure investors make well-informed decisions. To discuss you’re plans for rental property investment call us on +44 (0) 2039507939 or send us an email at info@thirlmeredeacon.com.

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Stuart Williams

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