The nation has spoken. We will leave the EU. But what are the implications for the UK housing market?
In the two working days we have had since ‘Brexit Day’ we have seen normal levels of enquiries, offers and sales.
Clearly the stock exchange has fallen since 8am on Friday with house builders shares being some of the worst hit. The pound has also fallen against other currencies, especially the US dollar. A falling pound will make imports more expensive which could cause inflation. Although the Bank of England may cut interest rates in the short term (this again will have a negative impact on the pounds value) it may have to raise them in the medium to long term to combat inflation.
If interest rates rise this may have a negative effect on house sales as it makes borrowing more expensive. However, job creation and retention has a huge impact on the UK housing market. The Great Yarmouth and Lowestoft areas job markets have already been effected by job losses in the oil and gas industry, HOWEVER, the housing market locally has remained robust through 2016. What this tells us is there is a strong demand locally for housing and the local economy isn’t completely reliant on oil and gas. This may also point towards a trend where the UK housing market can withstand Brexit as long as employment stays steady and confidence doesn’t fall in the medium to long term.
As Franklin D Roosevelt said ‘We have nothing to fear but fear itself’. As the days and weeks pass the fog will lift and the future will become clearer.