HOUSE prices in the UK have been stable and buoyant in recent months, despite the coronavirus pandemic. However, with a no deal Brexit potentially on the cards, an expert has warned that leaving the EU without a trade deal in place could impact house prices in London but won’t impact the property market as much as people think.
The deadline for a post-Brexit trade deal is fast approaching, with the possibly of a no deal now firmly on the cards. Today, European leasers have said a trade deal between the UK and EU is unlikely to be agreed. The EU and the UK have been locked in intensive talks for weeks, with fishing rights and competition rules remaining key sticking points.
Currently, the UK property market is experiencing a boom which has largely been encouraged by the government’s decision to impose a stamp duty holiday until March 31 2021.
However, experts have expressed fears that house prices could drop off next year if a trade deal isn’t agreed.
Mr Morrey, who is also the head of John Charcol’s specialist mortgage technical services team, predicted house prices could drop off if a deal is not agreed.
He said: “If there is no deal, and Europe is our single biggest trading partner by quite some margin, I believe… it will have a bit of an impact but probably more in London and the South East.
“They’re very sensitive to what happens with Brexit.
“Whereas, a lot of the regions, who of course actually voted for Brexit, may have a bit more confidence.
“The percentage of people who are abroad in Europe who will want to buy property in the UK is fairly small.
“So I think it [no deal] will have a confidence issue but it’s also within the backdrop of the stamp duty [holiday] coming to an end.”
Mr Morrey explained that while there are concerns over a no deal Brexit, the stamp duty holiday coming to an end is likely to have a bigger impact.
He also said trade between the UK and EU will still happen, just not “under the same terms”.
He continued: “I suspect the property market won’t be impacted anywhere near as much by a no deal than people think.
“Certainly not in the short term. Potentially in the longer term.
“It’s just been dwarfed by the other factors going on at the moment.
“But to get a trade deal will increase confidence and hopefully make the property market more resilient.”
The property expert explained further that no deal is likely to impact confidence in London.
He also said anything that impacts confidence tends to impact the property market.
Prime Minister Boris Johnson has said there is a “strong possibility” of a no deal.
If a deal is not agreed then the UK would trade on World Trade Organisation (WTO) terms.
The EU would impose tariffs on goods coming from the UK which could put some industries under pressure.
Source: The Express