It finally happened; the UK exited the EU at 11pm on 31 January – but what will the change mean for the future of the housing market?
Aside from the release of a new 50p coin, and the union flag being lowered from EU institutions in Brussels, it may not feel like much has changed. Britain has now entered an 11-month transition period, during which we will remain in the EU customs union and single market while lengthy trade negotiations take place.
Prolonged uncertainty over Brexit meant a difficult period for the housing market. Prices fell in London, with fears of the UK exiting the EU without a deal putting potential sellers and buyers off.
The decisive election result in December, however, is thought to have brought new confidence to the market and the so-called ‘Boris bounce’ led to a surge in buyer demand in December and January.
According to property portal Rightmove, there are all the signs of a buoyant spring to come. Says Rightmove’s Miles Shipside: “While there may well be more twists and turns to come in the Brexit saga, there is now an opportunity for sellers to get their property on the market for a spring move unaffected by Brexit deadlines.”
Figures also reveal that mortgage approvals rose in December. According to a report from the Nationwide, the month saw the highest increase in mortgages approved by high street lenders in five years. Miles Robinson from online mortgage broker Trussle said: “Following last month’s election people may begin to start having more confidence in the mortgage market. This, coupled with the strong foundation of mortgage lending in 2019, could provide a very solid base for the housing market over the next year.
However, there are warnings that Brexit’s full impact on house prices may remain to be seen. While Boris Johnson’s 31 January speech hailed Brexit as a “new era”, he also admitted there could be “bumps in the road” to come. If the UK fails to strike a deal with the EU by 31 December 2020, the country would still leave on WTO terms, which could impact on the market once more.