Property Prices After Brexit - RWinvest

The UK Property Market After BrexitProperty Prices After Brexit The issue of house prices after Brexit is one that’s been dominating the UK press for many years now. Ever since the Brexit vote in June 2016, there’s been a lot of uncertainty over how the UK economy and property market would be affected by the country’s exit from the EU. In 2019, the UK was set to leave the EU in March, and then again in October. Now into 2020, the country has entered a transition period following the UK’s formal leave from the EU on 31st January, which is expected to last until the end of the year. For those eager to find out the impact that Brexit will have on their finances and investments, we’ve put together this in-depth guide containing key information, expert predictions, and advice on property prices after Brexit. Contents Brexit Timeline - What’s Happened so Far? Price Growth Since the 2016 Brexit Vote The Boris Bounce Market Predictions 04 06 08 10 Click to View SectionDate for EU Referendum Vote Announced UK Votes to Leave the EU Theresa May Announced as Prime Minister General Election Saw May Lose Majority and Make a Deal With the DUP 18 April 2017 29 March 2017 15 January 2019 13 July 2016 8 June 2017 23 June 2016 22 February 2016 May Triggered Article 50 of the Lisbon Treaty May’s Withdrawal Deal Draft Rejected Theresa May Announced Plans to Hold a Snap General Election The Brexit Timeline What’s Happened so Far?13 March 2019 MPs say No to a No-Deal Brexit Deadline Pushed Back to 31st October Theresa May Resigns as PM Boris Johnson New PM MPs Back Withdrawal Agreement Bill 12 December 2019 29 October 2019 31 January 2020 24 July 2019 9 January 2020 24 May 2019 10 April 2019 UK Parliament Approve General Election Departure Day Boris Wins MajorityWhat Happened After the Brexit Vote in 2016? One way that we can try and find out about the overall effect Brexit will have on house prices is to look at past property price changes. So what actually happened in the months following the Brexit vote? Despite high levels of uncertainty, the UK economy and property market didn’t suffer as badly as first expected. The GBP Fluctuated The GBP had one of the biggest drops that the UK economy has experienced after the Brexit vote, with the pound sinking to a 31-year low against the dollar on Wednesday 6th July 2016. By 24th August, however, the pound rose to £1.32 against the US dollar – the highest rate it had been at in three weeks. The Property Market Stayed Resilient Findings from a Bank of England regional agents survey revealed that while there was a dip in UK property market activity following 23rd June, the market had proved to be far more resilient than first expected. By October 2016, house prices had risen by £2,623 in just one month, boosting the average UK house price to £309,122. In the year from October 2016 to October 2017, property prices in the UK as a whole grew by 4.5%, revealing an optimistic outlook for the UK’s housing market. Average rental yields in Northern UK areas also increased by up to 4.3% by the end of 2016. Further Growth From 2016 - 2019 According to data from the Land Registry House Price Index, UK house prices increased by 11% in the 40 months following the EU Referendum. The highest level of growth was seen in England, followed by Wales, Scotland, and Northern Ireland. Specific regions in the UK also saw higher growth in house prices after the Brexit vote in 2016, with the highest increases coming from the West Midlands, East Midlands, and the North West. The Boris Bounce In December 2019’s General Election, Boris Johnson was elected as Prime Minister with a large Tory majority. Ever since, both the UK economy and the UK property market have seen some major improvements. GBP As soon as the result of the General Election was announced in December 2019, the GBP reached a rate of 1.35 USD – the highest level it’s been at since May 2018. This massively increased confidence in the UK economy, especially since the GBP reached lows of 1.22 USD after Boris Johnson first became Prime Minister back in July 2019. Share Price Growth At the same time following the 2019 general election, investment sectors witnessed significant growth in share prices. The International Monetary Fund, an international financial organisation, has even predicted that thanks to the ‘Boris bounce’, the UK will see stronger growth than Germany, Japan, and France in 2020/21. Prices of FTSE 100 and FTSE 250 companies Grew by 1.1% and 3.4% Barclays, RBS and Lloyds saw share prices Grow by 6%, 8% and 5% Barrett and Permission reported share price Growth of 14% and 12%House Price Growth According to Halifax data, UK house prices in December reportedly leapt by 1.8% compared to the previous month, boosting the annual increase to 4%. Additional research also shows that as of January 2020, average asking prices for properties in the UK had risen by 2.3% since 12th December. According to Rightmove, this increase has added around £6,785 to the value of the average UK property, boosting the average property price to £306,810. This increase is the largest monthly rise for this time of year recorded by Rightmove since 2002. Average UK House Price Growth Septmber- December 2019Next >

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