The UK has decided it’s fate to exit the EU, but what will this mean for the UK property market and more importantly, Bury St Edmunds’ property market?
Before the referendum took place, the Remain camp made it clear that a Brexit could cause the property market to collapse. It is still too early to speculate whether this will happen, but so far the notion of the property market collapsing is far fetched.
Zoopla, the online property giant along with George Osborne believe the average UK property value may fall by 18%. Maybe a little extreme in their predictions but not one to outrule at this early stage. According to Nationwide Building Society’s latest index, house prices crept slightly higher in June 2016 by 0.2% but the effect of the Brexit vote on the market has yet to be felt in the upcoming months.
In the run up to the referendum, local estate agents reported that they experienced a drop in new instructions, as sellers appeared cautious on whether to sell now or wait until the market held more certainty. The immediate impact to the Bury St Edmunds’ housing market appears evident that a fall in housing turnover will potentially lead to a hold on house price growth, as sellers and buyers adopt a wait and see approach.
Bank of England’s Mark Carney spoke immediately after the Prime Minister’s resignation to reassure the financial markets. Including those who have invested and those looking to invest in the property market, he asserted that he will not hesitate to take any additional measures required. These measures could include a cut in interest rates to 0.25% that could in turn reduce monthly mortgage payments. Many potential purchasers will be adopting the wait and see approach to see whether this will actually take effect.
The first half of 2016 has been an interesting time for the UK property market with stamp duty changes, more challenging conditions for investors and most recently the EU referendum. When there is uncertainty amongst society, confidence is affected, which in turn affects decision making. Those people deciding whether to sell or purchase a property may now decide to delay that decision until the market has more certainty and stability.
As we move forward in the post-Brexit Britain, it is expected that the market will slow down around the local area and prices will soften but not fall. First time buyers may find it a little easier to get onto the property ladder with further positive news if interests rates are further reduced.
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Shazad Butt on 01284 755771 or