Post-Brexit House Prices Set for a Fall in ’17
Back in December 2015, when the Brexit decision was far from certain and actually widely unexpected, house prices in England and Wales were expected to rise by 4.5% in 2016 and 2017. Now all that has changed, post-Brexit uncertainty has sent the property market into a fearful slump and house prices are set to fall in 2017. That slump, however, is at least expected be a lot less impactful than the Treasury’s miserable pre-referendum prediction.
England property market to face a downfall in 2017.
Estate agents across the country and property solicitors in wolverhampton, Birmingham and Peterborough have begun to forecast for next year, and many have predicted a 1% fall in house prices countrywide, with a further 2% rise in 2018. As for what remains of this year, a rise of 2.5% is expected as the market cools and we move into the autumn.
House purchase fall post Brexit.
Data released from the Mortgage Advice Bureau shows that there were fewer mortgage applications in July of this year than in June, as buyers became nervous in the wake of the referendum result, deciding to hold off on any sizeable investment. Purchase application had previously been growing, but fell off by 5.9% in July. This shows there has already been fall in residential property market in England post Brexit.
Meanwhile, in August, the number of properties up for sale fell to a record low as house-sellers decided to hang onto their properties amidst fears of a slowing or even a reversal of house price growth.
Brexit to affect commercial property market in England .
With regard to the commercial property market, more and more companies are turning to short-term office contracts, as opposed to sales, whilst they see how the UK economy handles the uncertainty of the post-Brexit climate.
Reflecting this caution, providers of flexible office space reported a 10% increase in inquiries in July this year. In times of uncertainty, companies are much more willing to take on office space as and when they need it, as opposed to having to plump for a traditional minimum five-year contract.
Brexit responsible for property prices decline in England.
While there can be no doubt that the Brexit decision has been responsible for a fall in property growth, the increase in stamp duty in April is actually believed to have had even more of an impact, according to some property experts. The hike in stamp duty is believed to have mostly affected the top end of the market and the demand for expensive or luxury homes. This means that after many years of growth, house prices in this area are no longer expected to continue to rise and demand will be considerably weakened in the process.
Fall in property prices in 2017.
The fall in property prices in 2017 will see prices brought back to where they were at the end of the first quarter in 2016. Property lawyers have noted that although London will be hit particularly hard, with a predicted citywide fall of 1.25%, Wolverhampton property lawyers and property lawyers in West Bromwich have predicted a similar outlook for the city of Birmingham.
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