After the British Prime Minister Johnson took office, he has always stressed that it is better to leave the EU and not to have an unsatisfactory Brexit agreement, so that the market believes that the chances of a hard Brexit in the UK are very high
For the UK property market, which is still at a historically high level, once it is hard to leave the EU, its impact may be serious, which may eventually lead to the collapse of the property market. However, analysts generally believe that even if the UK is really hard to leave the European Union on October 31, property prices will not fall sharply, because the current supply is still tight, hard exchange will not lead to credit crunch, and the Bank of England may then Will cut interest rates to the property market and so on.
The UK is now very likely to leave the EU without a contract on October 31. By then, the actual income of the British will be greatly reduced, and the unemployment rate will also rise, which may eventually lead to a sharp fall in local property prices. In fact, thanks to record-breaking employment, real wage growth, and relatively cheap mortgage rates, UK property prices have steadily increased in most of the past decade. However, as property prices continue to rise, the affordability of the British has declined, and the British government has launched a hot trick to curb property prices. The UK property prices have gradually softened in recent years, superimposing the political instability caused by the referendum on the Brexit, and The worries of hard Brexit are deepening, and the UK property market has clearly weakened in recent years.
More buyers continue to wait and see
Although the latest data, including the number of approved mortgages in the UK, the property prices have bottomed out, but due to the high risk of hard Brexit, buyers may continue to wait and see, and continue to be on the market without entering the market. According to statistics from the housing agency Quick Move, in the first quarter, the sale of houses was not able to reach a trader, and there was one in every four cases.
However, the hard Brexit will not lead to an avalanche of property prices in the UK
One of the reasons is that although the Brexit has reduced the demand for housing, it also reduces the supply, as more and more prospective buyers take a wait-and-see attitude. Attitude, and in an environment of rising inflation, the lack of supply will stabilize property prices.
Recent political events have led to a sharp increase in the crisis of hard Brexit in the UK. According to a survey, the chances are as high as nearly 50%, but Niraji Shah, an economist at Stone & McCarthy Research Associates, believes that the UK property market will not collapse because of hard Although Brexit will make the economy worse and the number of unemployed rises, it will not lead to a credit crunch. Furthermore, if the British economy is severely hit by then, the Bank of England will cut interest rates again to save the economy. In addition, after the hard Brexit, the pound will fall further, which will also stimulate more overseas buyers to buy real estate in the UK.
According to data released by the Bank of England or the interest-reduction economic mortgage company Nationwide, UK property prices did not rise or fall in July and August, but still recorded an increase of 0.6% and 0.3% year-on-year and quarter-on-quarter. The company’s chief economist Robert Gardner believes that in the short term, a stable labor market and low borrowing costs will still support the property market, but the Brexit prospects are likely to continue to affect buyers’ sentiment and activities.
Another person who does not believe that hard Brexit will cause a fall in UK property prices is EY Item Club.