At the time of writing, it’s impossible to say how Brexit will impact the property market. All we can do is speculate as to what may happen, and hope that things don’t get too bad. For now, the markets aren’t looking too good, but this could be a temporary thing. If the markets continue this way, then we may be looking at some difficult times ahead:
Falling property prices
Property prices could fall, but this isn’t necessarily a good thing. If the economy stays in the position that it’s currently in, just a week after the referendum, then we’re in for a bit of a bad time. Those looking to buy a home, may find that they no longer have enough cash to afford one, even if property prices have fallen. This isn’t good news at all, as those who wish to buy a home, may have to stick to living where they currently are, even if it means staying at home with their parents for a little while longer.
Overseas investors may come in and buy property
This isn’t a bad thing at all, it just means that the properties are owned by someone else. It still means that the UK economy will benefit from the sale of the home, but only if those renting the property pay the money to someone who intends to spend the cash in the UK. At the time of writing those living in the UK can still do business with those in the EU, but we may have to wait until January 2017 to see what real difference it will make.
Some European construction workers may have to re-think about living in the UK
Fingers crossed that those who come from Europe to work in the UK, can still work here. If those who come from EU countries are told they can no longer work here, or Brexit means working here is difficult, we may see a real decline in the number of properties that are built. This is because there will be fewer people to work on the construction sites, which means houses, and business properties won’t spring up quite so fast. This means there could be fewer affordable homes, and that’s never good for the economy.
Fewer houses will be bought
Even if our EU friends are told that can rightfully stay in the UK and work here (They do contribute to the economy after all), people may buy fewer homes because it’s likely they will be more careful with their cash. When the property market isn’t doing so well, fewer people will want to part with their hard earned cash, even if house prices are lower. After all, if the value of a home is likely to fall by a few thousand pounds, is there any point in buying it in the first place? What’s more is mortgage rates may rise, as could other rates, that just make buying and owning a home a little riskier than usual.
Demand for rental accommodation may fall
Because a lot of people may be out of pocket, they may fail to go ahead and rent a property they were thinking of renting otherwise. This is likely to result in increased rents as landlords and landladies fail to find enough tenants for all of their homes. If the mortgage has already been paid off on the property, then it may do no harm to keep the rent as it is, but that all depends on how much the cost of living rises by.
If the demand for rental accommodation falls, it could result in the homes in question being put up for sale. The only trouble with this is that not everyone will want to buy a new home if the market crashes. What’s more is those who currently live in rented accommodation, may find that their rental bills increase as the cost of living increases.
Waiting for things to get back on track
Some people are not worried about the state of the market. They have seen it all before, and know that huge events can have an impact on the exchange rate, and how much money people spend. Things may get back on track after a few weeks, or even a few months, but I guess that all depends on how the EU reacts to many British voters wanting to pull out of the European Union. Only time will tell as to how Brexit will impact the property market, and all we can do is wait and see.
For now, it may be wise to hold off on that property purchase, until you know for sure that the value of the home you’re thinking of buying, does not dramatically decrease.
Play it safe, regularly check how the markets are doing, and only buy a home when you think it’s safe to do so.