Last week, European Council President, Donald Tusk, accepted the UK’s formal request to withdraw from the European Union, signalling the beginning of the end of 44 years of EU membership for the UK.
Teresa May pledged to:
“…set out a clear and ambitious plan with the European Union” for “a partnership for the best interest for the UK, the European Union and the wider world.”
But what does this mean?
The only real certainty is that we are about to enter a period of absolute uncertainty. Very little is likely to happen over the next few months, but as the 2-year countdown to the UK leaving the EU begins, one thing that home-owners and property investors throughout the country will be questioning is how will the Lisbon Treaty affect house prices across the UK?
Since the announcement of BREXIT in 2016, the UK’s house price growth has slowed. According to the latest data from Land Registry, the annual rate of growth for the average UK house price fell from 7.7% in January to 6.9% in October.
Mark Hayward, Managing Director of the National Association of Estate Agents (NAEA), has said:
“It would be an understatement to say this year has not gone as expected. However, the property market is mostly still feeling the effects of events which happened last year... Next year, we expect it'll be more of the same; there won't be a 'property Armageddon', but things won't get much better for first-time buyers, and those looking to up or downsize."
However not everyone agrees, and this is where the profound and unsettling uncertainty hits. Although the rate of growth for UK house prices has slowed, the fact remains that house prices are still rising. British building society, Nationwide, believes house prices will continue to rise in the face of BREXIT, just a little slower.
Chief Economist at Nationwide, Robert Gardner, has said:
“Looking forward, house price prospects will depend crucially on developments in the wider economy, around which there is a larger degree of uncertainty than usual.
“Like most forecasters, including the Back of England, we expect the UK economy to slow modestly next year, which is likely to result in less robust labour market conditions and modestly slower house price growth.
"But we continue to think a small gain (around 2%) is more likely than a decline over 2017 as a whole, since low interest rates are expected to help underpin demand while a shortage of home on the market will continue to provide support for house prices."
The fact of the matter is, at this point, everything written above is purely speculation based on very few statistics, and no opinion or survey can be seen as hard evidence of what is happening, or going to happen to the UK housing market.
House prices are still on the rise, and the property market is holding strong; for now, that's all property investors need to know.
Ogilvy and Sneyd provide a residential property management and lettings service for property investors, buy-to-let investors and property landlords in Staffordshire. Follow their industry blog at www.ogilvyandsneyd.co.uk