Demand is far outpacing supply in property as brexit nears
The real estate market is already getting affected by brexit. The uncertainty regarding the shape of brexit is having an impact on real estate. Demand is far outpacing supply despite efforts by successive governments. Even after government initiatives to stimulate house building and government-run schemes such as Help to Buy which includes the Shared Ownership scheme and the Help to Buy Isa, the scenario has not changed much. But the government is on target with its commitment to provide £2bn for affordable housing. But the crisis has been compounded by brexit which is playing is its own role in complicating things further. It is making matters only worse and the property market is ample evidence of that, although, the scenario is better than it was in August.
New property listings fell 13 per cent in August but the figure was up by 20.2 per cent in September compared to August, according to a survey by online estate agents, HouseSimple.com, making the scenario look somewhat better. But, chief executive at HouseSimple.com, Alex Gosling, says that summer is generally a quieter time for property transactions and sellers marketing their properties, which makes it difficult to know the impact of brexit on supply. The research showed that new property supply in London rose 44.4 per cent in September versus August.
So, the trend already downwards, worries now concern a further dive in the sector as brexit approaches and finally takes place in the near future. Fears are, since the market is already witnessing a downfall, the scenario could be worse after brexit. This is not without reason, because there are a number of factors that come with brexit which include a demand for curtailing immigration, movement of jobs outside the UK etc. This is true especially regarding jobs in the financial services sector, most of which is based in London, as firms look to move their headquarters elsewhere in Europe. The chief executive at HouseSimple.com, Alex Gosling, believes the housing market is proving “extremely resilient to Brexit hyperbole”. He says that there is lack of new listings, but this is not something new as it existed before the brexit vote.
But, it is also a fact that London and the south east markets, which have traditionally seen the strongest growth rates in the past few years, are also showing signs of low growth over recent months. David Torpey, managing director and chief operating officer at Bluestone Mortgages echoes the sentiment by others in the sector when he says that uncertainty surrounding brexit is not positive for any market. He says that it is different for markets outside the UK as the global economy has improved since the financial crisis of 2007. Some say that a dearth of housing in Britain was there for a long time and term the blaming brexit for the crisis as merely a distraction from the real issue.
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