The Impact of Brexit on the UK Real Estate Market
Real estate prices in the United Kingdom are seriously slowing. As a result of Brexit, they rose by only 0.5% in 2018. In a climate of wait-and-see and economic uncertainties, buyers and investors are increasingly cautious. What trends, what forecasts for the overseas market? We take stock.
Zoom on real estate prices in the UK
While they were up 2.6% in 2017, real estate prices in the UK are at or near halt. The increase over the 12 months 2018 is 0.5% according to the figures of Nationwide, nationalist national bank. Moreover, they are even down 0.7% in December 2018. A context that had not been observed since 2013. As the months go by, real estate prices are struggling to maintain their momentum. : + 4.5% in 2016, + 2.6% in 2017, + 0.5% in 2018, -0.7% in December 2018.
Buyers are no longer at the rendezvous on the market. Real estate purchase intentions are less and less when the homes offered for sale are also decreasing. The salesmen themselves are in expectation.
Why are real estate prices falling in the UK?
While the market was buoyant and buoyant some time ago, economic uncertainties are largely responsible for this turnaround. Brexit is responsible for this gloomy climate: "It is likely that the recent slowdown is due to the impact on buyers' morale of economic uncertainty, " says Robert Gardner, an economist at Nationwide. Individuals and professionals expect to know more about the Brexit outlines next March.
And yet, the real estate market would have everything to find colors. Wages are rising in the country, mortgage rates are very good and the unemployment rate is historically low. Indicators therefore look green on this side to encourage market recovery.
Real estate prices in the UK uneven across territories
The Nationwide study also highlights a strong disparity in property prices by city and geographic area. In the north-west and Yorkshire, the increases are still present, the Brexit is not (yet?) Feel.
But beware, the average price of housing today is twice as high in the south than in the north.
Another highlight of the study, real estate prices in London are down. They fell by -0.8% in the last quarter of 2018 and year-on-year. Even more, six quarters ago they are losing ground. A statement that says a lot about the mistrust of buyers and investors.
What trends for real estate prices in the UK in 2019?
Given this context, what are the prospects for 2019? According to the Nationwide, it is difficult to predict with certainty trends for the current year. The renewal of vitality will mainly depend on "the speed with which these economic uncertainties will subside" according to Robert Gardner. A small national price increase would still be expected in the next twelve months.