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After much uncertainty regarding whether or not Brexit would have a positive or negative impact on the property market, there is belief that demand will remain strong throughout 2021.
Paresh Raja of Market Financial Solutions has described the property market as effectively offering the two kinds of assets that people look to during moments like these; “In times of volatility and uncertainty, people tend to gravitate towards assets that are not only positioned to deliver returns, but can also provide some kind of security.”
Raja’s belief that the property market has long been able to recover quickly from any set-backs is perfectly evident by the increased demand in property as a result of the Stamp Duty Holiday being announced in July 2020.
While this may be looking at property in terms of an investment perspective, this does raise the question of whether demand will remain high amidst any potential economic difficulties. To that end, Raja believes that even if the pound weakens (which could very well happen), there is definitely scope for international buyers to invest in the UK property.
Even though the trade deal was agreed on in December 2020, there is still a great deal of uncertainty surrounding what Brexit will mean in the long term. For every argument for it being good for the property market, there is another suggesting that it causes uncertainty and turmoil. And if there is one thing the property market does not enjoy, it is uncertainty.
For example, the impact of the Covid-19 pandemic saw house prices surge, but a 38% reduction in the total value of property sold compared to the previous year. As Ben Taylor, CEO of Keller Williams, said that this movement is “significant when you consider that it is compared with a 2019 market that was already operating sluggishly due to Brexit uncertainty.”
Lucian Cook, a director at Savills, believes that the year will be split into three parts. The first will see a rush of buyers trying to beat the end of the Stamp Duty Holiday. The second part is likely to be a dramatic slow down in activity and movement in the immediate wake of this (potentially 20 to 30 percent below normal) before eventually picking up when the “levels of unemployment fall and the vaccine programme takes effect in the third part. Reports of extensions to both the Stamp Duty Holiday and furlough scheme until the end of June, however, could see these stages be delayed as the economy recovers.
While the jury is still out on the kind of impact Brexit will have on the property market, there is a majority that believes that the most immediate impacts to the industry will be as a result of Covid.
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