How will Brexit affect property values?
How will Brexit affect UK property values?
Brexit is the word of the moment and with the set leaving date of 29th March 2019 inching closer every day, people from all industries are starting to ask the same question – “What will change post-Brexit?”
When it comes to what might change with UK property value post-Brexit, the real answer to that question is that nobody really knows the answer. Brexit and uncertainty are now almost synonymous words, and so it is no surprise that no firm assurances can be made about the housing market once we leave the European Union. Let’s face it, at this point we don’t even have certainty that we will be leaving Europe, or what the terms will be when we eventually do.
However, despite these uncertainties, it doesn’t stop speculation and some very extreme predictions being made about what could happen to the UK Property Market. People wonder if the housing market could crash; if values will soar or plummet; if we should be buying right now or waiting for the dust to settle; and if indeed property will any longer be a good, solid investment when we leave the EU.
So, what can we make of Brexit Property Industry speculation?
Jonathan Samuels, The chief executive of lender Octane Capital, summarised that: “Brexit has smashed property market sentiment to smithereens. Buying and selling property requires confidence, but confidence, as we edge closer to Brexit, is close to zero. For countless prospective buyers, Brexit has put everything on hold.” It is perhaps for this reason of a total lack of confidence that we have seen the property values fluctuating so much in recent months when compared with other economic and investment measures. Buyers may be having unsupported reactions to worries about the value of property which has been leading to further instability.
Despite the fluctuating market, it is important to remember that when it comes to property, we can keep in mind a few essentials that will remain the same regardless of the UK’s position in Europe.
Property is only ever worth what a buyer is willing to pay for it.
Brexit may be able to change many aspects of business as we know it today, but one thing Brexit won’t change is the ‘worth’ of a property. Since property buying and selling began, there has been a very straightforward calculation of how much time the build has taken, how much the labour cost has been and how much has been spent on the materials for the build so that a profit can be made.
However, we all know that what the house will be ‘worth’ in the end is a very different amount depending on a variety of factors. Where is the location? What amenities can it offer? Does it have good transport links? What is the local school like? and ultimately, what is the supply and demand for that particular property type? Brexit cannot change the fact that has always been true – a property is only ever worth what a buyer will hand over for it.
Property is always a solid long-term asset when compared with other purchases.
Here at Westcolt, we have no doubts about the fact that owning property will still be a solid aspiration post-Brexit. When we buy for the right reasons and with personal financial stability, property will continue to be a valid long-term investment. Avoid reading too much into speculation and short-term property values. There may well be upheaval right after Brexit, but, avoid panic-buying and selling and be prepared to wait it out to reap the benefits of your property investment and you will be fine.
Good property management will help avoid debts and financial strain.
When it comes to property, getting into large debt has never been a good idea, and it will still be a bad idea post-Brexit. One of the biggest property pitfalls is when buyers panic-buy or snap up property regardless of cost to jump on the bandwagon with everyone else. If you avoid buying a property with a huge mortgage, extortionate running costs, large moving fees and early leaving penalties, you should be able to protect yourself from financial strain.
As we mentioned earlier, nobody knows precisely what will happen with the property market post-Brexit, however, if you focus on living within your means and avoid any hasty decision making when it comes to buying or selling, you are positioning yourself well to ride out the uncertainties.
Summary | How will Brexit affect property value?
So, we can only answer that we won’t know what will happen to the UK property market until after Brexit. However, we can advise that solid property management, long-term goals and living within your means may well be the best approach. A beautiful house with kerb appeal in a sought-after location with decent land will always be desirable, no matter what happens on March 29th 2019. Property will almost certainly still be a robust and solid investment and yield a good return if you are prepared to be in it for the long-term.