09 Sep 09.09.2016 UK’s economy situation after Brexit vote
09.09.2016 UK’s economy situation after Brexit vote
In spite of the uncertainty in the UK housing market following the Brexit vote, people in general are quite optimistic about the UK property market in the long term. Figures released by various research institutes suggested that signs of market slowdown were hardly seen. UK Land Registry recorded a 8.7% year-on-year growth of the UK property price as of June 2016. House prices increased by 0.6% in August, according to Nationwide.
The UK property market has a strong correlation with the economy. Figures suggested that the country’s economy is steady growing rather than slowing down after the Brexit vote. Unemployment rate dropped slightly from 6.3% to 4.9% in 2016 since January and less than 0.34% of the population is in heavy mortgage areas. Furthermore, no amendment was made on mortgage policy or criteria since Brexit, suggesting that banks are still will to lend.
For investment activities, unlike what various commenters predicted, the country’s property investment activities stayed strong. A spate of homebuyers of various countries including Nigeria and China are showing interests in UK properties that priced between£1 million and£2 million since the Brexit vote, according to Douglas & Gordon. Knight Frank received massive enquiries from relocation agents after Brexit as well.
Specifically, in terms of Buy To Let landlords, the majority of real estate agents surveyed by the Association of Residential Lettings Agents experience no material change to London rent prices, supply of properties or demand from tenants in July following the Brexit vote. Savills believed that rents in London would increase by 3.70% year-on-year in the next five years. Simultaneously, real estate agents in London are receiving stronger demand and more enquiries from homebuyers. According to Persimmon Homes, over the past seven weeks since Brexit, the number of prospective buyers visiting sites was up 20%, while the number of homes reserved by customers increased by 17%. Furthermore, number of first time buyers (FTBs) recorded a 10% increase to 154,200 in the first six months of 2016, compared to the same period last year. All in all, the Brexit effect on UK property market is rather positive and passive.