On Wednesday 29th March, Theresa May triggered Article 50, kick-starting the Brexit process. So, what’s in store for London’s sales and rental markets as the UK prepares to break with Europe?
Possibility of greater stability
In one respect, it removes the uncertainty surrounding when Britain’s withdrawal process from the EU will start, encouraging people to get on with their lives. Years of low transactions are almost always followed by years of increased activity.
Number of house sales will rise across the UK
The UK property market is heavily reliant on confidence – as evidenced by the fact that transaction levels have been suffering since the Brexit vote. The triggering of Article 50 provides certainty from the government that its plan for leaving the EU cannot be derailed.
Property price growth will be slow but demand for homes will outweigh effects of any uncertainty
The expectation, pre-referendum, that house prices would collapse was very wide of the mark. House prices are still rising across the UK. The London market remains impervious and, with such a shortage of stock, the overwhelming level of housing demand will plug any gaps of depleted buyer interest.
Interest rates won’t rise
It may well make the Bank of England reluctant to increase interest rates, despite the recent increase in inflation. The mortgage market thus far appears unmoved by the prospect of Brexit, as lenders’ interest rates continued to fall throughout 2016 and into this year. There is still a real appetite for banks to lend. The rates are very competitive and there are still plenty of high loan-to-value mortgages.
Our property experts are on hand to discuss selling or letting your property. Get in touch with your local branch today.