Rewind to the aftermath of the Brexit result, we saw the Bank of England cut the base rate from 0.50% to 0.25%, something that hasn’t been changed since 2009. Along with a decline in mortgage approvals and an eye-watering devaluation of the pound to a 31-year low, it seemed the ‘doom and gloom’ that Remainers predicted was very much certain. However, fast forward for a few months and it seems that on the surface, although the initial shock of the referendum result led to a short-term negative effect on the markets, they have subsequently begun to stabilise.
Incredibly, the UK even showed an increase in economic growth of 0.5% for the third quarter of the year (June – September) with the statistics being mainly bolstered by the public sector. This was something that many hadn’t expected to see, with experts predicting only a 0.2% growth. Halifax also reported that UK house prices jumped by an unexpected 1.4% in October, compared to September's figures which showed a slowing; therefore surpassing the 0.1% monthly increase forecast by economists and erasing a post-referendum jolt.
House prices are now up 5.2% from this time in 2015, according to the gauge, putting the average UK property value at £217,411. On a quarterly measure, prices edged up just 0.1% in the three months to October.
Although the devaluation of the pound has devastated the currency, it has given overseas investors a great opportunity to focus on the UK property market. The fall in value against the dollar means investments are much more attractive as they will be getting more for their money. According to estate agents Hamptons International***, in the third quarter of 2016, Chinese purchases of higher end London properties increased from 1.8% to 2.6% compared to the second quarter, ending the decline of purchases seen in the market.
For now, however, no legal changes have been made and only after Article 50 has been invoked and deals with the EU have been fully ironed out will everybody know the consequences. In that time, the demand for skilled workers will remain, giving European contractors hope.
So, is now the best time to invest in UK property?
For some, it could be. Off the back of Brexit has come the benefit of impressive mortgage rate cuts, with many remortgagers and first-time buyers reaping the rewards of such low rates.
Luke Somerset from Contractor Commercials added: “No one knows what the future holds, with Brexit, Trump – and even with the unrest in other parts of Europe. Locking into a longer, fixed rate deal could at least give homeowners the certainty of payments until the country has seen out of the other side of the EU exit.”