Oct 28, 2019
The Impact of Brexit on the European Property Market
The Brexit saga continues to go on and as such is making an impact across a whole host of industries such as the property market. Most industries have been hesitant within this period but not the housing market. Both domestic and foreign investment has continued to pour into the UK and European markets, which has seen an increase in house prices, as well as many attractive investment opportunities.
This was also shown in some research earlier this year that found that almost half of property investors have added to their portfolios since the start of the EU referendum, with only a small percentage selling due to this. This gives an indication that despite continued unrest, it is not proving a deterrent when it comes to the property markets and investment. There has also been a number of trends in the last few years that have shaped the property market following the referendum. These being:
- The Strength of Regional Growth
The biggest hit that has been taken is in London, as house prices have remained stagnated or even dropped. There has been market fluctuations around the UK since the referendum, starting within an initial plummet to now great progress around many areas. Some of the key areas for growth have been in the Midlands are North of England areas. Examples include Birmingham rising by around 16%, Leicester 15%, and Manchester also 15%. Other key areas include the likes of Nottingham at 14%, Leeds 12% and both Sheffield and Liverpool at 11%. These are all key indications of the growth in areas around the UK and why it remains an attractive option for investors. The reasons behind much of this have been the different regeneration projects that have been taking place and redevelopment.
- Property as an asset
Property remains a very popular choice when it comes to assets. There continues to be both private and public investment that has helped the recent growth within the sector and this is only set to continue. There has also been seen in people investing in property across Europe, which
has seen an impact following the EU referendum. Another example that showed the recent growth is the number of property transactions that have taken place, which has risen year on year, with 1.3% higher in 2019 than was shown in 2018 at this point.
People have continued to invest in property, despite the continued uncertainty around Brexit. This is yet another example of people’s thoughts on property investment and why it is seen as a great asset for long term returns. This covers regular house buyers and property investors on a bigger scale.
- Market Challenges
Despite the many positives given in this article, there are also many market challenges that must be addressed. These follow on from the obvious challenges that have surfaced from the Brexit saga. In the UK, there still remains a housing crisis at the lower scale, this comes down to there not being enough affordable and accessible houses available. This is something that the government has put a lot of time and effort into addressing, such as with the different help to buy schemes that are now on offer and have proved popular. There still remains a growing demand for property, so this is something that will need to be looked at again in the near future, to give people a better chance of getting onto the property ladder.
This process was something that Former Prime Minister Theresa May set out, in which she said the government would deliver over 300,000 new homes onto the UK market by the mid-stages of 2020. It looks at present that this is going to fall a little short but it is a positive step for change and meaning there is more opportunity for people to get onto the property ladder in the near future.
Brexit has been the priority for the government in recent times and this is why many other areas have been neglected and not dealt with right away. This will be the next step in order to help the rebalancing when it comes to housing supply and demand, through promoting the construction of new-builds. The latter is being pushed through the help to buy offerings for first-time buyers.
There is little doubt that in the UK and European on a whole, that housing is going to remain one of the most popular forms of investment. It has continued over time to be one of the most resilient forms of investment and this is not set to change any time soon.