On the 24th of December the UK and EU agreed a Brexit deal, after months of negotiations, which laid out the trade agreement and level of ongoing European involvement. As of the 1st of January, the Brexit deal came into effect.
The housing market has remained resilient over the years, dealing with political and economic uncertainty, including the recent strengths shown throughout the coronavirus pandemic. But how will the housing market be impacted by the Brexit deal?
In the short term:
It is thought that Brexit is unlikely to have much of an impact on the sector in the short term. In fact, the country’s economic recovery and job uncertainty is more likely to have an impact on house prices in the next quarter.
Job losses caused by Brexit could lead to a slight drop in house prices. The increase in house prices we saw in 2020 has already been forecasted to slow down in 2021, despite some arguing that prices will not fall by much. If house price growth does slow down it could be a beneficial time for property investment.
Housing market demand:
Demand should remain strong until 31st of March when the stamp duty holiday finishes. It is expected that even after the stamp duty holiday ends people will still be eager to move home after reassessing their home priorities in the wake of the coronavirus pandemic.
Unemployment levels are rising and when the furlough scheme ends in April it is expected unemployment levels will reach their highest. This is more likely to affect the housing market than Brexit. Job uncertainty will likely lead to people renting for longer.
Some buyers may wait and see how the economy and housing market fares, however 2020 has shown us that many people are confident to purchase a property during a global pandemic, therefore people are likely to be confident to buy a property post-Brexit.
Will the market keep moving?
Although there is uncertainty with how the Brexit deal will impact the economy and the housing market, because of the strength in the market seen since the reopening from the first national lockdown in 2020, it is thought that the market will remain strong.
The approval of two COVID-19 vaccines in the UK will give confidence to the wider economy and the housing market.