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LONDON — Brexit, which is looking more and more uncertain with Prime Minister Theresa May taking a regular beating has cast a shadow on the British economy. Not only has it pounded the British currency, it is dampening the property market and London has experienced a fall in property prices for two years in a row. Optimism about the British property market, which has experienced continued growth since the 1990s despite a slight slowdown after the credit crunch, is at its lowest in twenty years. The outlook for people wishing to invest in the UK property market, particularly in London and South East England is not favourable. Added to the softening in prices, the UK government is planning to introduce a levy on foreign buyers to pay for rough sleepers in the country. For South Africans looking to invest in the UK property market, the Rand-Sterling exchange rate is favourable while Brexit uncertainty continues and there are still investment opportunities outside London. Northern Ireland property prices have risen by 5.8% and those in Wales by 4% in the last year. – Linda van Tilburg
The Royal Institution of Chartered Surveyors blamed Brexit uncertainty and a lack of housing supply for the malaise revealed in its latest monthly survey published Thursday.
Near-term sales expectations fell to their lowest since records began in 1999 and an index of prices slid deeper into negative territory.
The 12-month outlook for sales expectations was slightly more upbeat, suggesting uncertainty surrounding what form of departure the UK will make from the European Union in March is playing a significant role.
“It is hardly a surprise with ongoing uncertainty about the path to Brexit dominating the news agenda, that even allowing for the normal patterns around the Christmas holidays, buyer interest in purchasing property in December was subdued,” said RICS Chief Economist Simon Rubinsohn. “This is also very clearly reflected in a worsening trend in near-term sales expectations.”
The UK-wide figures do mask some regional differences, RICS said. Prices are anticipated to either rise or hold steady across the country, apart from in London and the southeast. The capital’s property market has been particularly badly affected by the uncertainty surrounding Britain’s split from its largest trading partner. Prime Minister Theresa May’s proposed withdrawal agreement was struck down in Parliament this week, leaving the government in disarray.
The turmoil has left agents across the country begging for clarity.
“Please resolve Brexit to restore confidence,” implored Christopher Jowett, from Jowett Chartered Surveyors and Estate Agents in Huddersfield. John Haigh, of Lister Haigh (Yorkshire) simply said “Oh for an end to Brexit uncertainty.”
Here’s a round-up of other agents’ comments in the RICS survey:
Kevin Ryan, Carter Jonas, in London:
“A quiet December in terms of sales activity. In addition, previously arranged sales wobbling.”
Richard Powell, Ryder & Dutton, in the northwest:
“The continuing Brexit uncertainty is a real drag on the property market.”
Tom Dogger, B N Investment, in London:
“With the chaos of Brexit continuing to dampen confidence and exacerbating falling prices, combined with a weak currency, will the foreign investor return?”
Richard Going, Farrar & Co in Chelsea, in London:
“Brexit, Stamp Duty Land Tax, potential extra 1% for international buyers, market confidence non-existent.”