About three years ago, the UK decided to exit from the European Union. They did so in the search for independence, but little did they know that they were walking into an uncertain future. A lot has changed since then and among the most noticeable changes that have been the main topic of discussion is housing. The Brexit exit decision has brought significant confusion to the housing market, and everyone is hoping for the best.
Some individuals believe that the exit decision will adversely affect home values. For starters, it resulted in some changes in the immigration policy. This, in return, has reduced the number of foreigners moving to the UK, thus reduced housing demand from abroad. The exit process has also resulted in uncertainties in the market, which instilled fear into home buyers and sellers. These are some of the views and observations, and if the predictions come to pass, new homeowners will definitely be pushed to the wrong edge.
Others, on the other hand, believe that Brexit exit comes with positive effects and advantages to aspiring homeowners. Initially, home prices were continually increasing, which made the dream of owning a home seem unattainable. It is anticipated that houses prices will fall by up to 35% with the no-Brexit deal, and this could end up helping some individuals to climb up the property ladder.
Before determining how leaving Brexit will affect new homeowners, we must check into the major problems that they face, and the main ones include;
The first one goes without saying, and it is affordability. It is everyone’s dream to have a place they can call their own someday, but the cost does not seem to be on their side. Wages have remained constant for over a decade since the financial crisis in 2008, and this has adversely affected growth. The UK’s average house price is £231, 163. We can all agree that it is quite a high price and requires financial stability to afford.
The other main problem facing home buyers other than affordability is the inability to access loans and other forms of financial help. With tight lending regulations, it has become harder for homebuyers to access help. They need to have good credit scores and a significant deposit at hand before seeking help.
Even with the anticipated fall in housing demand as a result of leaving Brexit, things have turned out just fine. The demand remains high, and individuals are still saving towards this goal. With the high demand, the prices are expected to stay high too.
Brexit will not do much to address these issues, and therefore, its effect on housing will be minimal. The primary way in which Brexit will affect home buyers and limit them from reaching their goal is through its impact on mortgage availability. Lenders are applying rigorous lending regulations, making it harder for buyers to acquire loans at a relatively low interest. Other than that, everything else might remain as before the Brexit exit and prospects should keep up with whatever they are doing to attain their homeownership goal.