Just a few weeks before the referendum vote in 2016, the serving Chancellor of the Exchequer at the time, George Osborne, warned the country that UK house prices could tumble by up to 18%1 if the country voted in favour of the Brexit changes.
Is that what happened? Brexit certainly changed the property market, but what impact did it really have?
Pre-Brexit predictions
Osborne’s comments were indicative of the discourse at the time, both political and economic, and across the media there were widespread, polarised views that seesawed from one extreme to the other, painting either a very bleak picture or something a lot brighter.
He wasn’t the only one making such assumptions, but the reality was that no one was in a position to truly make accurate predictions. In fact, with the benefit of hindsight, we know that most of the claims at the time were inaccurate.
Brexit may have had a minor impact and may continue to have one for the foreseeable future, but the housing market remains largely unaffected by it. What we’re seeing now is more due to interest rates, disruption in supply, and migration across the country. In the time between the 2016 vote and the details revealed in 20202, the UK saw plenty of shifts and movements across the board, many of which contributed more to house prices than Brexit did.
In terms of the housing market, here’s what we know now.
In June 2016, the average UK home cost about £212,000. By March 2021, this number had risen to around £256,000 which is close to a 20% increase3. In June 2022, the average UK home was valued at around £286,0004.
Demand for property remains strong
Despite uncertainty, both economically and politically, the housing market and investment in real estate is still going strong. Since both domestic and foreign buyers see UK real estate (especially residential) as a secure investment, they are likely to favour brick and mortar assets in times of uncertainty and national transition.
Navigating the property market
Investing can sometimes be tricky. When times seem good, property prices can quickly rise, but this means there’s typically more competition for properties and it can be harder to find a good deal. When times seem uncertain, there can be great opportunities to find a bargain. However, you then risk potentially buying now and the property market dipping dramatically when you want to sell.
Landlords and investors should consider a few things to help mitigate uncertainty:
- Check what prices are like compared to a year ago - can you find something at a lower price in return for a quick sale?
- Take a fresh look at your local rental market. If demand is changing, will you be able to find a new tenant quickly if your current one moves on?
- Review your buy-to-let mortgages and consider moving to a fixed rate deal to even out any fluctuating interest rates
- Have a back-up plan in your arsenal for if rents must fall. Consider insurance to protect against arrears and if you need to sell, set yourself a minimum so you don’t lose out.
Managing your investments
Some things we can predict and others we simply can’t. While this may seem stressful, there’s plenty you can do to ensure you’re always on top of what’s happening with your home.
For help with the current market, or to secure insurances on your properties and rentals, get in touch with an adviser today.
Important information
Your home may be repossessed if you do not keep up repayments on your mortgage.
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