A no-deal Brexit will have a severe effect on the UK’s property market, according to reports. The total reduction in the value of housing prices in the UK will be around £240bn in six months.
Experts predict that housing prices will fall by 3 percent on an average in six months after Brexit and up to 10 percent in London. However, an orderly Brexit with a proper agreement will increase property prices in the UK by 1.5 percent.
Previously, a weaker pound resulted in foreigners buying properties in the UK, especially London. But, the new report suggests foreign demands will also decrease compared to previous years. Prices of houses in London have already decreased by 5 percent.
Property market consultant Henry Pryor told the media, “Despite the new prime minister and team in government there are big icebergs ahead, not least the apparent willingness to leave the European Union without a deal. This is likely to spook the markets before it reassures them.”
Fewer properties were sold in the UK in the first half of 2019 than at any point since the first half of 2009, with London seeing the highest decline. But another report suggests that the sale of residential houses in the UK have surged to its highest since 2015. According to Miles Shipside, director at Rightmove, buyers are now looking to complete deals ahead of the latest Brexit deadline at the end of October.
Low mortgage rates and intense competition among banks to sign borrowers have also contributed to the increased demand for housing properties.