In less than two months, the next negotiations for the United Kingdom leaving the European Union are about to happen, with leading economists scrambling for potential scenarios for the current and future state of the UK’s economy in various industries. Besides being a political dilemma, different markets such as the automotive and real estate markets are about to face dangerous implications.
As of now, property markets nationwide in the UK have varied results, with certain areas reaching stagnation while others have little bursts of increases and decreases. Certain ‘Brexit-proof’ areas are Northern Ireland and Wales who boast a resilience to the property market’s problems with a surprising 5% or so yearly increase that seems to be unhindered by the current political waters.
The Bank of England’s Mark Carney predicts a 35% drop in current house prices. Though the governor insists that it’s a hypothetical scenario that’s open to different possibilities, economists back at the Royal Institute of Chartered Surveyors (RICS) are highlighting the fact that a no-deal scenario would lead to increasing hesitance in property investments adding up to its current already problematic state.
Tarrant Parsons of the RICS sees the inconclusive decision of a no-deal causing the property market to be in a scuffle as the real estate market’s patience and resilience might be put to the test as growing doubt on the favourable nature of properties is put into question. The housing market is sure to face negative consequences if a no-deal scenario comes to be the case.
A non-Brexit deal?
Even if a no-deal comes to pass, the prospect of a consistently shaky political and economic state of the UK can prove to be its downfall which would eventually lead to a middle ground for both parties. In place of a Brexit deal, another negotiation tactic might be in place to keep the withdrawal and transition period to be beneficial for both the United Kingdom and the European Union. Real Estate consultant services by Gerald Eve and other local consultancy agencies are working overtime with the arrival of Brexit’s implications in the economy. Both investors and homeowners from different sectors are making various speculations on whether or not the absolute negative or the absolute positive will be the result of the political debacle.
A sign for a positive outcome?
There is some hope for a positive result out of this confusion. For starters, it’s highly unlikely that a property market crash would stem from Brexit alone. Its comparison to the stock market is an unfair comparison as real estate is much more resilient and it takes more time for shifts in power and prices to take effect.
Whatever the case will be, it can be confirmed that there will be a definite slowing down of events in the property market. Though analysts are hopeful that it won’t lead to stagnation, they are also recommending that current and prospective homeowners and investors not be too quick to let go of their properties.