{"id":13896,"date":"2022-02-08T04:29:18","date_gmt":"2022-02-07T20:29:18","guid":{"rendered":"https:\/\/www.dev.articusfinance.com\/uncategorized-sg\/two-years-on-has-brexit-affected-the-property-market"},"modified":"2023-09-15T12:49:16","modified_gmt":"2023-09-15T04:49:16","slug":"two-years-on-has-brexit-affected-the-property-market","status":"publish","type":"post","link":"https:\/\/backup.articusfinance.com\/sg\/blog\/two-years-on-has-brexit-affected-the-property-market","title":{"rendered":"Two years on: has Brexit affected the property market?"},"content":{"rendered":"

When the result of the Brexit referendum was announced, many predicted that chaos would ensue \u2013 and the property market was undoubtedly one of the areas where some expected to see collateral damage.<\/p>\n

<\/p>\n

For those buying, selling or refinancing property across the country, particularly high value property, the last few years have been uncertain to say the least. But despite the confusion, the fact remains that, two years on from Brexit, the property market is looking as resilient as ever \u2013 even throwing a global pandemic into the mix.<\/p>\n

Price growth, not price crashes<\/strong><\/span><\/p>\n

There was certainly a period of uncertainty where we saw potential investors holding off from making decisions, as they waited to see how the dust of Brexit would settle in the time between the vote and leaving Europe.<\/p>\n

What we didn\u2019t<\/em> see, however, was a major crash. And now, two years on from leaving, we\u2019ve witnessed the opposite. Since the UK left the EU, prices have \u2018had a huge boom<\/a>\u2019 with the growth being spread fairly evenly across the country. Last year marked the first time average UK property price has surpassed \u00a3250,000.<\/p>\n

Our sense is that this growth is \u2018in spite of\u2019 Brexit, rather than because of it \u2013 but this is a clear indicator that those predicting doom for the UK\u2019s property market post-exit were wrong. Ultimately, there is great demand for property across the UK, and because this demand continues to outstrip supply, a major property crash simply isn\u2019t on the cards.<\/p>\n

How has Brexit impacted the high-value property market?\u00a0<\/strong><\/span><\/p>\n

A similar story holds in the prime end of the market. Again, there was a definite period between 2016 and January 2020 when investors were more cautious and slower to move than they had been previously \u2013 but in our experience, this was more a case of \u2018growth slowing\u2019 than \u2018market crashing\u2019.<\/p>\n

As for the point when Britain actually left the EU, the realistic answer is that it\u2019s impossible to unpick the specific impact of Brexit. Just two months later, Covid-19 lockdowns began around the world, grinding the property market almost to a complete halt as viewings and surveys were put on pause. Covid-19 has been the big story ever since \u2013 and even despite that<\/em> disruption, we\u2019ve seen a market with changing rather than decreasing demand.<\/p>\n

For example, throughout 2020 and 2021, buyers were seeking larger properties with gardens \u2013 and were willing to travel further out from Prime Central London to get it. It\u2019s worth noting, however, that many agents are reporting a shift back towards more traditional Prime Central London properties as restrictions loosen and many major firms confirm they\u2019ll expect staff in offices at least two to three days a week.<\/p>\n

Elsewhere, some predicted that London\u2019s property would become less competitive and therefore cheaper due to the absence of EU buyers. Such predictions failed to account for the extraordinary demand for property in the capital: London is, after all, a truly global city beloved by domestic and<\/em> international buyers.<\/p>\n

The impact on commercial property\u00a0<\/strong><\/span><\/p>\n

At Articus, we regularly assist clients with commercial property financing \u2013 so we\u2019ve watched the evolution of the post-Brexit commercial property market with interest.<\/p>\n

The biggest fear was that major companies would move their headquarters out of the UK. No matter your stance on Brexit, it\u2019s undeniable that the handling of the process has caused huge confusion and uncertainty for British businesses. A number of firms have<\/em> left \u2013 but we haven\u2019t seen the widespread exodus to other countries that some were expecting. At any rate, there is still much to be ironed out: an agreement between the EU and UK on the future of financial services hasn\u2019t yet been reached, so this story is very much in flux.<\/p>\n

However, as with residential property, it\u2019s difficult to truly judge the impact of Brexit because the bigger commercial property story has been Covid-19 lockdowns and their impact on city centre spaces or offices. Fortunately, signs of recovery are strong.<\/p>\n

In 2012, the volume of investment in commercial property was 4% above the five-year average \u2013 as Savills put it <\/a>\u2018investors are confident that the office will still play a crucial role in working life, with regional office investment volumes for this year as of the end of July increasing by 40% compared the same period in 2020. But providing the type of space that occupiers want (high quality, well-connected with good ESG credentials) is crucial.\u2019<\/p>\n

The availability of mortgage finance<\/span>\u00a0<\/strong><\/p>\n

The UK\u2019s property market has proven itself resilient, regardless of Brexit and<\/em> Covid-19. But what about the mortgage market? In the early days of both the vote and our actual departure, many of our clients asked questions about the potential impact of Brexit on mortgages.<\/p>\n

The reality is that very little has changed for domestic buyers. Lenders have plenty of available finance and the average rate of a mortgage product decreased in the years following the referendum \u2013\u00a0 although as previously discussed, further increases in the base rate are expected as a result of inflation. Inflation could of course be partially attributed to Brexit, but the increases we have seen so far have been very small, and offset in part by lenders offering lower rates on mortgage products. EU citizens living and working in the UK can still arrange mortgages.<\/p>\n

In spite of it all, UK property continues strong\u00a0<\/strong><\/span><\/p>\n

The reality is that it\u2019s impossible to truly establish the impact of Brexit on the UK\u2019s property or mortgage market: the start of the Covid-19 pandemic has muddied the waters entirely, and we\u2019ll never know how things might otherwise have played out.<\/p>\n

But the story is still being written. Negotiations are ongoing, and we won\u2019t truly understand the legacy of Brexit for many years to come. For now, all we can<\/em> say for certain is both the mortgage market and the property market have shown their resilience, so whether you\u2019re looking to buy a new home, invest in commercial property or refinance an existing asset, domestic clients have very little to worry about.<\/p>\n

Looking to invest or refinance your property? Speak to an Articus advisor today. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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