What does Brexit Mean for the property market?
As property investors we know the underlying issue that drives property prices up and up is the demand we have in the UK versus inadequate supply. Nothing much is going to change there, whether we stayed in the EU or now we are leaving it. We have a base or latent demand for property in the UK of somewhere between 2 and 3 million housing units (we’re not sure for instance how many people WOULD leave home and go into their own property if they could). With demand that high and insufficient supply we always have support for housing prices.
The overriding issue we have is that people still need to live somewhere.
That’s true whether we’re in Europe or not but there will be a difference in how they live. When there is uncertainty the normal public don’t buy houses, so they rent. For us as landlords this drives up supply. Sadly for the UK public as a whole I suspect there will be an increase in rental prices overall as a result. So good news for landlords which I’m sure won’t add to our popularity!
Interest rates still look unlikely to rise. What the Bank of England do when there is market uncertainty is drop rates not increase them, and we have seen a lowering of mortgage rates rather than increases.
We are likely to be in a period of prolonged uncertainty. The knock on effect of the recent Election will add to that so we need to get very focused on our investing strategy.
I believe it is going to be a rental market and a buyer’s market. We are all going to need a bit of gumption to take advantage of what is the biggest opportunity. We’ve had to get into the property market place for some considerable time.
Now is the time to go shopping for properties, stagnant prices, an uncertain economy and low interest rates. What could be better?