Brexit and the Housing Market

In case you missed it, the UK and EU agreed a Brexit deal on the 24th December 2020 which laid out a trade agreement and the level of involvement the UK would have in Europe. The deal came into effect on the 1st January 2021, ending the withdrawal agreement.

Since the EU referendum in 2016, all business sectors in the UK have been dealing with heightened levels of uncertainty. Not knowing when the UK’s withdrawal from the EU would happen was replaced with the threat of a ‘no deal’. Now that we are on the other side of the withdrawal, we can start to look at how the UK’s new status could affect our industry with a little more clarity.

We are still inundated with enquiries; so, if you are thinking of making your move, we are always adding to our amazing catalogue of properties for sale in Virginia Water and the surrounding areas so, visit our award-winning website or call us on 01344 843000 and email us.

House Prices

With a deal with the EU in place, it is unlikely that the value of property will be affected in the short term. House Prices are more likely to be impacted by the economy’s recovery from the Covid-19 pandemic, which at the time of writing (22/01/2021) has most of the UK in a lock down with more people losing their jobs every week.

If Brexit causes similar levels of job loss then we could see house prices dip, but the worst-case scenario is that house price growth will slow down in 2021; this slowing will present a good time to invest in UK property which will buoy the market.

Housing Demand

Housing demand tends to be driven by employment rates and the availability of attractive mortgage rates. In the UK mortgage rates have been kept at record lows, thanks to the Covid-19 pandemic, with some experts predicting that we could see the Bank of England lower the base rate into negative territory.

The good news is that lenders are increasing in confidence and so more mortgage products are on the market, making it easier for investors and home owners to borrow for their property purchases. However, with no body really knowing which way the chips may fall, there is the same risk of rates increasing which is sparking people into locking in low-rate mortgage products.

We also have the bonus of the Stamp Duty Holiday which is in place until 31st March 2021 (accurate at time of writing). This Government scheme ensured there was a boom in activity when the housing market reopened after the first lock down in May 2020. This scheme, coupled with the general public having to spend more time at home and reassessing their home priorities is likely to keep the demand for property high. Specifically, we have seen a deluge of people escaping the City in favour of access to more green spaces while still a commutable distance from London.

As the Stamp Duty Holliday and Furlough schemes end in March and April respectively, we could see rising levels of unemployment; at which point transaction levels might drop – this will only spur investors to purchase.

Confidence in the Market

At the moment there are two vaccines available to UK citizens. Reports this week (w/c 18/01/2021) suggest that the NHS is currently administering 200 vaccines per minute, so we expect to see an increase in confidence to return to work and the possibility of some semblance of normality to follow by the spring.

The UK housing market has remained strong since reopening in May ’20 and so it is unlikely that the sector will be too negatively impacted by Brexit.

Get in Touch

If you are thinking of moving to the area, make sure you take a look at our amazing catalogue of properties for sale in Virginia Water and the surrounding areas.

If you’d like to speak to someone about properties to let in Virginia Water, a member of our expert team would be happy to help. You can call us on 01344 843000 or email us. You can also follow us on Facebook, Twitter, Instagram and LinkedIn.