Many people will be surprised to see that the UK housing market remained relatively resilient, outside of London, during April 2019. This comes at a time of what can only be described as “excessive” volatility in the political arena. It seems a given that Theresa May will very soon depart from Number 10 and then the battle will commence for her successor. So, why is the UK housing market so resilient?
We have mentioned currency weakness on numerous occasions. In light of the ongoing uncertainty surrounding Theresa May’s future, and the ever-growing constitutional crisis regarding Brexit, it is no surprise see sterling fall to new lows. As a consequence, this makes UK housing more attractive and more affordable to those acquiring property in dollars and euros. Indeed, there are many other major currencies around the world which have also benefited from the ongoing weakness in sterling. Is it a case of buy now while stocks last or simply wait and see?
Despite concerns that UK economy will tip into recession in the event of a no deal Brexit, the UK economy has remained extremely resilient. Month by month the excuses rollout, businesses are stockpiling ahead of a no deal Brexit, there is investment stagnation, etc, etc. Since the referendum back in 2016 sceptics have been predicting a crash in the UK housing market and the UK economy. So far (London property aside) these doomsday predictions look no nearer today than they did in the immediate aftermath of the EU referendum.
Immigration is to a certain extent a red herring when it comes to concerns about the UK in the short, medium and long-term after Brexit. The idea that UK immigration numbers will collapse is simply wrong. In a worst-case scenario, the only change will see those from EU states treated like the rest of the world when it comes to UK immigration. As a consequence, the UK population will still continue to grow as will demand for private rental properties.
Sellers holding firm
Against a backdrop of currency weakness, encouraging overseas investment, a resilient economy and growing population, many property sellers are holding firm on their prices. While London is obviously a very different market, having risen far faster than the rest of the UK in years gone by, outside of London we have yet to see any real weakness. When you also factor in the extremely negative media headlines regarding Brexit, and the so-called threat of a no deal Brexit, this puts the performance of the housing market in an even more favourable light.
Amidst the doom and gloom of Brexit, forecasts of a crash in the UK economy and housing market, let’s not forget that the UK was never really an integral part of the European Union. Successive governments, and the electorate, have refused to adopt the euro meaning the UK is in a very different situation to its current EU counterparts. As a consequence, while there may be some short to medium term disruption in the event of a no deal Brexit many long-term property investment strategies have so far emerged relatively unscathed.
Month after month the headlines suggest that outside of London the UK housing market remains extremely resilient. While the press will obviously make hay while the sun shines with regards to the reduction in London property prices, this does not really reflect the UK as a whole. It would be foolish to suggest there are no challenges regarding Brexit but so far UK consumers, businesses and investors remain relatively positive in the longer term.