Brexit: What does it mean for the local property market?
Mon 27 Jun 2016
There are many unanswered questions from last week’s EU Referendum and people are desperately seeking answers on a wide range of topics, including the property market. Many experts had predicted a drop in house prices if Britain chose to leave the EU and it is fair to say that the local market had stagnated a little in the run-up to the vote – but does that mean it is all doom and gloom for local homeowners and those looking to move? Not necessarily.
We are taking a leap into the unknown, of course, and nobody knows anything for certain where Brexit is concerned. However, whether you are looking to move, keen to get on the ladder or have a portfolio of investment properties, a lot will depend on what happens with interest rates.
The pound dropped before the decision was even confirmed last Friday morning, and some believe this could lead to an increase in interest rates to combat pressure on inflation. Some homeowners would face an increase in their mortgage and it is true that house prices may fall, but that is not always a bad thing.
It would be good news for first time buyers who are struggling to get on the property ladder and there is even an argument to say that more people may put their home on the market if they fear prices will drop, which would certainly help buyers in the local market where demand continues to outstrip supply.
Alternatively – and remember we are still very much guessing about what impact Brexit will have on so many aspects of our lives – the Bank of England may choose to keep interest rates as they are, or even lower them, to try and alleviate the short-term impact.
In fact, the National Association of Estate Agents (NAEA) has predicted that house prices won’t fall, and will in fact continue to rise – albeit at a lower rate than they would have done if we were staying in the EU.
Whatever happens in the short-medium term, the fact remains that people will continue to move home and there are not enough houses to satisfy demand. If we do see a drop in prices, storms will pass and prices will recover – and nobody is better placed to spot those trends than a local, trusted high street estate agent like Green & Co.