Back in 2016, the much anticipated BREXIT referendum was causing ripples of concern for the property market. Many articles written at the time suggested that the impact of Brexit could be significant – everything from pressure on housing stock from an immigration surge to higher mortgage payments were discussed as experts tried to decipher the potential fall- out of the historical vote.
In the midst of the negativity though, it was also suggested that there could be a positive impact with more cash available to invest in our own infrastructure since we would no longer be required to make financial contributions to the EU.
Fast forward to early 2018
Just 18 months after the historical vote and it’s being widely reported that UK house prices are falling, but the general consensus is that this is NOT linked to the Brexit process.
In January, the Halifax said UK house prices fell by 0.6% in December and added that prices only rose by 2.7% during 2017 with quarterly growth rate slowing to 1.3% in the last three months of the year.
Although remainers have suggested that Britain’s impending exit from the EU has caused this decline, there is speculation that it’s mainly the London market driving the fall. Experts suggest that instead of Brexit causing the slow down, the property bubble is simply finally bursting in London, where house price growth has been 70% over the past decade.
A recently published Reuters poll of 28 housing market specialists predicts that property prices in 2018 will rise by 1.3% nationally but fall by 0.3% in London. Nationwide and Halifax, who operate well-know price indices, are broadly in agreement.
So what does this mean for us in York?
It’s still difficult to pinpoint what the aftermath of Brexit will look like for the property market – both locally and in the UK as a whole – as the negotiations are protracted and on-going.
Many of the concerns highlighted in 2016 haven’t actually materialised. Uncertainty can result in potential buyers and sellers choosing to stay put and not move unless they have to – although this was a predicted outcome back in 2016 but the expected stall hasn’t actually happened.
In London, there is a genuine concern that if major international firms relocate their headquarters outside of the UK, there will be lower demand for high end property as highly paid executives move overseas. In York, we are likely to be impacted much less than London by any such exodus.
York is a culturally diverse city with many overseas students. Changing enrolment rules for universities and colleges could put off international students coming to the UK to study – this would have a knock-on effect on the demand for property – which would mean bad news for student landlords.
Change in immigration rules as a result of Brexit could potentially impact the York property market.
Since 1995, the foreign born population in North & East Yorkshire has increased by 181% – figures from The Migration Observatory at the University of Oxford state that 125,000 migrants were living in our area by 2015. If our border control is tightened, this could result in a last ditch immigration surge which could put short term pressure on housing stock. Figures already show that migration is responsible for a third of social housing shortages but the private sector would also be impacted. However, in the longer term, if immigration was to reduce under Brexit, demand for housing could reduce.
Worried about Brexit and wondering how much your property is worth?
Try our instant online valuation tool to satisfy your curiosity! Alternatively, let our valuers are always on hand if you’re thinking of selling in the near future. Just give us a call on 01904 655222 or complete our valuation form here