Following the announcement of Britain’s decision to leave the EU, the impact of Brexit on the property market has been one of the most discussed topics.
The immediate negative impact on the market following the vote sent shockwaves through the country as voters discovered the potential impact of Brexit for the first time.
Since then, this immediate negative impact on the market has started to subside. As the property market begins to steady out again we can start to take a more informed look at how Brexit is likely to affect the property market over the coming months.
How will Brexit affect commercial property investments?
Although some commercial property investment funds were forced to shut up shop for a while as investors panicked and tried to withdraw their investments, they are now beginning to open again as the market adjusts itself and investors regain confidence. Likewise, although shares in housebuilding companies decreased up to 40% in the initial aftermath of the Brexit vote they are now showing positive signs of recovery.
How will Brexit affect house prices?
In the residential property market there is some evidence that since the referendum there have been fewer transactions and slower growth but experts have said there have not been any signs of a potential crash.
Conversely, according to the Royal Institution of Chartered Surveyors (Rics), apart from in London where house prices have fallen slightly, the rest of the country is still seeing moderate increases in house prices. A Rics survey also found out that even after the referendum estate agents and surveyors still believe house prices to increase around 14% on current levels within the next five years.
How will Brexit affect foreign property investment?
The fall in the value of the pound may also have a significant impact on the property market. Foreign interest in UK property has risen since the referendum. Juwai, China’s largest International Property Portal, has stated there has been a 40% increase in interest in UK property by Chinese investors as the value of the pound has fallen against the Yuan and the Dollar.
The long-term implications of Brexit on the property market may not be realised until Article 50 is triggered and Britain actually leaves the single market.