Rayleigh & Hockley – how brexit affecting property prices?
It is now April of 2019, we have passed the original Brexit day, and still the United Kingdom remains cloaked in a fog of uncertainty over Brexit and what happens next.
While political deadlock has meant little progress for the Prime Minister and her current withdrawal agreement, the British economy has been left uncertain about exactly what the future might hold.
As a result, there has been continued debate over the scale and the full impact that Brexit could have on businesses and livelihoods across the country. That’s not even beginning to take into consideration the impact that could be had if we are now forced to leave the EU without a deal.
A buoyant housing market is reliant upon the wider health of the British economy, as it relies on residents having money to invest and spend. If the population faces economic hardship or due to uncertainty feel the need to minimise expenditure, the housing market is often one of the first to be affected. If there is less money in public hands, there is less money to be spent on property and this can have wide scale ramifications.
Yet, whilst the economic consequences of Brexit have been much debated and a source of vast speculation, the housing market has often been neglected from these discussions. This is despite the fact that there could be large scale consequences as a result of any economic damage and the fact that the country is reliant upon it as a sector.
However, while the consequences of our actual Brexit remain a far off and mythical question, it is the current and continued uncertainty that poses the biggest contemporary threat to the British housing market.
In the immediate aftermath of the 2016 EU referendum, the housing market seemed to have come out unscathed, with many anticipating that it would remain untouched by the chaos around it. Yet recent research has come to understand that Brexit reverberations have now begun to take effect.
In fact, recent research conducted by Just Move has suggested that the economic and political uncertainty has already began to affect it. As a result of the economic uncertainty and political stalemate, citizens are beginning to be cautious with their approach. As a result, there appears to have been a shrinking of housing sales.
This is particularly visible at this time of the year, as it is a telling time for the housing market.
Traditionally, Spring has represented a key marker for housing sales, as it tends to pick up its pace following a wintertime slump. Usually in March, there is an immediate recovery as buyers begin to invest in property once again. However, current figures suggest that this is not the case in 2019.
We decided to do some search ourselves on the SS5 & SS6 postcodes. According to Zoopla’s statistics, the SS6 postcodes (Rayleigh) property prices have increased 0.92% making the average price of a property now £378,652. However surprisingly SS5 (Hockley) has seen an amazing increase of 2.34% in the past 12 months making the average property prices now £392,185.
When we look at the last 3 months which gives us a good indication of the market today, in SS5 prices continued to rise 0.8% and SS6 was 0.24%. which gives us a great indication even with the uncertainty of Brexit, the market is still continuing to rise.
We then decided to look at recorded sales through Zoopla, When we look at completions (money changing hands and keys being handed over) in the SS6 postcode, in the past 3 months there were 50 sales the 3 months previous to this there were 125 sales. The same with SS5 in the past 3 months there were 28 sales, and the 3 months prior to this there were 87. Which is a clear indication that although prices are still on the rise, there are fewer sales happening.
Naturally, any property will sell if it is priced correctly, however looking at the research above, it would indicate that a slight reduction in the sale price of only a couple of percent could make the difference between selling and not.
In an article published on The Guardian, Miles Shipside from Right Move stated that this was likely down to ‘Brexit anxiety’. (LINK – https://www.theguardian.com/business/2019/mar/18/brexit-property-uk-asking-prices-fall-rightmove)
As a result, housing prices have slowed down and historically this has had huge consequences for British finances. If the public are feeling confident in the economy and housing prices, they are more likely to lend against the value of their home. As a result, there is more money to be spent on goods and services, to pay off debt or to supplement a pension. This therefore benefits the overall economy and essentially poses a catch-22.
The current decrease in sales should be seen as a warning sign for the government and one might be a sign of what could be to come.
It should be viewed as another key reason why political institutions need to find a suitable and manageable solution to the problem. This plan would help cease the current uncertainty within the UK, help to stabilise the current concerns and protect the economy from any potential damages.
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