Brexit finally happened when the United Kingdom formally left the EU on the 31st January at 11pm. At this point, the country instantly entered into a transition period of 11 months, which means that Britain will continue to pay money into the EU27 and still abide by EU regulations and rules.
Although the majority of things will likely continue in the same way in the short term, we will start to see some changes. For example, there will no longer be MEPs (Member of European Parliament) present from the UK, no presence from the UK at European Union summits, a commemorative Brexit 50p coin is going to be introduced, the Organisation for Exiting the EU will cease to exist, which was launched in 2016 by Theresa May the former Prime Minister, and blue passports will make a return for UK citizens, to replace the current burgundy passports.
Director at SevenCapital, a UK property investment firm, Andy Foote, has stated that the world and the UK are waiting with growing anticipation now that the clock has struck and Brexit will begin. Dedicated Brexiteers have celebrated the start of a new era, but what will happen from this point, nobody knows for sure.
The challenges for the real estate sector, as well as the financial and capital markets, crucially, will depend on a post Brexit rebound. There are some real signals of optimism for the housing market currently, as evidence of an immediate uplift for buyer demand is apparent, now that the Brexit deadline has passed and a general election has taken place.
According to property portal, Rightmove, demand from potential house buyers throughout the UK grew by 28 per cent in the first few days following the UK general election, compared with the same time period in 2018. The biggest leap was also recorded in the capital, which was up by 54 per cent.
Many analysts are forecasting that in 2020, there will be growth, partly due to what some commentators are calling the ‘Boris bounce’ to the economy. Therefore, as we move on from ambiguity in politics, a healthier housing sector is emerging. However, it still remains to be proven if the potential boost to the housing market will be merely short term.
Mr Foote has also noted that with the majority opinion among the public seeming to be a longing to ensure Brexit is a success, then we can expect a likely return to business as usual and an uplift in attitude. This is in contrast to the more hesitant approach experienced over the past few months.
However, how long the improvement will last is dependent on the next stages in this transition period. The likely scenario is that the summit in June could be where the EU and the UK meet together to discuss and review the status of negotiations which are currently being held, and to see if deals will be made in order to start on the 1st January 2021. This will be the most significant hint of success, and the market watches in anticipation.
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What is important and apparent to understand in the meantime, particularly for buyers and investors in property, who are considering whether to wait or make a property purchase now, is that house prices are continuing to grow, despite this time of uncertainty.
However slow this may seem, the market is indicating that it will move. This creates potential opportunities for risk-averse investors to buy or invest before the market bounces back, and to pause for the housing market to reach increased growth again.