Post Brexit Property Crash Predicted – Get Ready To Invest!
Brexit Uncertainty Could Be Good News for Property Investors
The Bank of England predicts that the housing market could be hit hard by Brexit. Those contemplating an investment should prepare to pounce.
Mike Carney, the Governor of the Bank of England, sent the media into something of a frenzy last month with his predictions that house prices could fall by as much as 35 percent, echoing warnings of a 33 percent price fall in the event of a “disorderly exit” that were made this time last year.
What once seemed theoretical is now looking very real, with Brexit just a few short months away. Of course, nothing is certain, and some commentators feel the effect will be far milder. However, most are in agreement that prices will fall to a certain extent.
Any investor knows that fluctuating prices can always represent an opportunity, as well as a risk – it is all a case of being on the right side of the transaction. In this case, the time might be just right for those looking to buy an investment property. And in this age of million pound mortgages at attractive rates, there is set to be more choice than ever.
A self-fulfilling prophesy?
The result of the 2016 referendum had only a mild, and short lived, impact on property prices, despite similar expectations of a crash that circulated among commentators at the time. As a result, some are wondering if this is another false alarm, and the property market will battle through unscathed again.
Of course, it is possible. However, the very warnings emanating from Mr Carney are causing jitters in the market. And this time, unlike the surprise result of the referendum, we know that Brexit is definitely coming.
We also have a certain amount of existing data to work with. Theresa May has seen one proposal after another fail to come to fruition, and each time, it has dealt a body blow to property prices. According to data from the Office of National Statistics, prices in London dropped by 0.7 percent in the first six months of the year, while transactions were down by 20 percent. In short, the effects of Brexit are already being felt.
The bigger they are…
The most telling statistic, however, relates to those larger value properties. The number of homes in the £2 million plus bracket placed on the market dropped by 25 percent in the third quarter of 2018. It suggests a “watch and wait” attitude among sellers, and there is a feeling among estate agents that it is only a matter of time before something breaks.
When that happens, there could be a sudden deluge of higher value properties hitting the market and prices are liable to tumble. As was the case in 2016, the dip might be short lived, and so there is every probability of a real opportunity for those with the finance available to take advantage.
There has never been a better time to sit down with a mortgage advisor to see what you can afford – whether it is a Scottish castle or a London penthouse, you might suddenly discover that the property of your dreams is in easier reach than you imagined!
You May Also Enjoy
Roller Garage Doors: 7 Essential Buying Tips.
Glenigan Construction Index: Pockets of regional resilience, do little to offset faltering confidence
How to Create a Stylish and Comfortable Home Office
Zoopla Rental Market Report: Rents rising at lowest level for 3.5 years
Commonhold White Paper – Thoughts from the Industry
