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UK Housing Slump Continues in Wake of Brexit Uncertainty

Written by Posted On Monday, 30 October 2017 08:43
UK Housing Slump Continues in Wake of Brexit Uncertainty

In 2016 the result of the UK's European Referendum saw approximately 51% vote 'leave', and this momentus decision has led to a year of market instability, numerous business concerns and a weakened pound, as well as causing the Conservative Party government no end of political headaches. As the Brexit negotiations between the UK and the EU continue to stall and little to no progress is being made, many are already looking at the implications of the UK's decision to withdraw from the European Union and wondering if it wasn't a hugely costly mistake. 

From the import sector raising valid concerns about more expensive products from abroad to the creative arts and steel industries voicing worries about the loss of freedom of movement, Brexit has been a major issue for business leaders and investors across a wide range of sectors. Although numerous markets have been affected, one seeing a particularly negative impact is the UK housing market, which remains in a slump following the uncertainty around the Brexit negotiations. 

A report released by the Royal Instituion of Chartered Surveyors (RICS) in August 2017 found that the Brexit uncertainty, along with increases in stamp duty, have added to the drop in the overall market - particularly in London. Speaking to The Independent newspaper, Robert Ikin of Wright Marshall said: 

Brexit uncertainties are not helping the market, also stamp duty levels are not helping.

To put the drop into perspective, the Office for National Statistics (ONS) gave a house-price growth rate of 8.2 percent in June 2016, in the same month of 2017, they estimated it to be 5.1 percent. Echoing this finding, the Nationwide's Index reported a continued slowdown of growth between July and August this year. There is perhaps a hint of good news however, in that this market slump is less severe than was predicted. Before the Brexit referendum in 2016, the UK Treasury predicted that house prices could be 10 to 18 percent lower in the event of a vote to Leave the European Union. 

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