Since the EU Referendum in 2016, Brexit has typically been blamed for the sluggish housing climate we are currently experiencing in the UK. However, is it all too easy to make Brexit the scapegoat for a static market when a number of other key factors are also at play?

INHOUS co-founder, David Johnson, believes that the Prime Central London housing market has, in fact, slowed down due to a number of other non-Brexit related reasons, but the problem is frequently incorrectly being attributed to Brexit. Brexit is the headline in the public eye but not the sole cause by any means.

A number of key factors have been leading towards our current housing climate, but their impact is going unrecognised and overshadowed by Brexit. For instance:

• Stamp Duty Increase – now 3% for second homes and 12% for properties of £1.5 million and over
• Capital Gains Tax and its impact on overseas investors – From April 2019, non-UK residents who dispose of UK real estate will be taxed on any gains they make
• Clamping down on who is buying properties – estate agents and lawyers are now forced to verify who is buying property and where their money is coming from, particularly with overseas investors

A positive side to Brexit?

Now that the Brexit date has been pushed back again (to 31 October 2019), David believes that UK property will start to shift – which we can all agree is necessary! In fact, INHOUS is seeing that vendors are realising that now is the time to sell and, thankfully, the stalemate is on the brink of breaking.

This sense of urgency and shift in vendor optimism is primarily being triggered by Brexit. The underlying factors slowing the market have been there for a good few years and are generating a steady rotation.

Moreover, although demand from international buyers has always been strong in Prime Central London, the demographic is shifting. We are seeing less enquiries from the Russian and Middle Eastern markets, but an increasing number of potential buyers emerging from America, Europe and Asia.

Looking Ahead

Those keeping a watchful eye on the property sector are naturally apprehensive about what 2019 will mean for bricks and mortar. For decades it has been a popular avenue for international and domestic investment, but will UK real estate, Prime Central London in particular, be able to hold onto its status?

If recent performance is any indication, we should have faith in the property market’s ability to weather the storm. Indeed, the long-term outlook for the market remains positive, with Savills predicting that average UK house prices will rise by nearly 15% between 2019 and 2023. This figure is slightly lower in the Capital’s prime locations but the new five-year forecast also predicts prices to bounce back within a year or two. In Prime Central London, Savills are predicting house prices will climb 6% in 2021, with a 12.4% overall rise in prices between 2019 and 2023.