Dipping your toes into the housing market for the first time is daunting enough, but with the shadow of Brexit looming large it can seem like a minefield. With a litany of pre-Brexit fearmongering and warnings in the media, first time buyers are being put off. But how will our split from the EU affect them?
Residential People have years of experience working to connect people with property, and they revolutionised the way people search for properties. Here, they discuss ways which Brexit will impact first time buyers.
1. Potential dip in sterling value
As fears surrounding the possibility of a no-deal Brexit grow, a weak pound is something to consider. Having hit a 27-month low as the deadline approaches, experts are foreshadowing parity with the dollar should we reach a nodeal, and a plummeting pound could signal a rise in house prices due to in influx of overseas property investment.
2. Young homeowners on the decline
The chaotic economy has rendered property ownership out of reach for many young people. Studies have found that 1 in 3 UK millennials will never own a home, with rising rental costs taking their toll as the pound weakens. With 40% of young adults unable to afford the cheapest homes in their area, homeownership is on the decline as Brexit nears.
3. Less mortgages being taken
It’s undeniable that Brexit has caused a wave of uncertainty throughout the property market, resulting in a slow and uncertain buying market. As such, fewer people are taking out mortgages, possibly due to the economic worries that the possibility of a no-deal Brexit has provoked.
4. Loss of labour
How big businesses are faring is usually a good barometer of the current economic state. The FTSE reveals how major companies are operating during Brexit, and job losses caused by the volatility could equate to a loss in labour. This can harm the market by reducing the number of homebuilders and materials, as well as a lack of skilled foreign workers.
5. Visa uncertainty
A healthy housing market requires political stability to thrive, and the current unstable political eco-system caused by Brexit has had a huge impact. For first time foreign buyers and investors looking to purchase property, question marks hang over visas, making the UK property market appear unappealing and inaccessible.