West End Property Post Brexit
What does Brexit mean for Glasgow’s Property Market?
In June this year, British citizens voted to leave the European Union. It’s a turbulent time in British politics with ongoing debate and some uncertainty as to what exactly a ‘Leave’ vote means for us.
You will have heard on television, in our newspapers and online about the potential impact that Brexit will have on interest rates, investment, wages and banking and therefore, on property.
So, what does Brexit, a process that, currently, is suggested to occur in full by March 2017, mean for Glasgow’s property market in particular? Particularly in the West End of the city.
Contrary to what some commentators have predicted, many might be pleased to know that, so far, house prices and the housing market in general is still going strong in Glasgow’s West.
Glasgow Live recently reported that Glasgow is one of the major UK cities showing a rise in property prices. In June, just after the referendum decision, property values were 3.7% higher than they had been in the same month in 2015. The average house price in Glasgow was £113,400. (Source: http://www.glasgowlive.co.uk/news/glasgow-news/glasgow-house-prices-rise-despite-11644572).
The popular news site also reported in recent weeks that sought after properties in areas like the West End in particular do not seem to have been affected by Brexit so far. Prices look like they are stable for now.
However, Glasgow Live did speculate that sellers lack of confidence in our current political climate might, naturally, encourage some to put off selling their properties immediately. This could cause the market to slow down slightly as sellers want to make informed decisions about how best to handle their property. (Source: http://www.glasgowlive.co.uk/news/glasgow-news/confidence-glasgow-housing-market-post-11861099)
However, many key voices in property suggest that perhaps these early reports are too complacent and time is needed for the dust to settle on the impact of Brexit for property.
The Herald Scotland heard from Alistair Reid, director of Jones Lang La Salle, that Brexit is likely to halt the progress of many commercial new builds occurring in Glasgow. Although he thinks the rest of 2016 will showcase some stability, he expressed concern that there are still many unknown factors in the financial impact of the UK’s political decision on Glasgow’s property market. (Source: http://www.heraldscotland.com/business/14635163.Brexit_puts_the_brakes_on_Glasgow_commercial_property_boom/).
Renters & Sellers
For those renting properties, the pressure is off slightly for how you might need to re-evaluate your decision making post Brexit. These slight decrease in house prices may mean some potential sellers are more likely to rent rather than sell meaning you could capitalise on this uncertainty.
Similarly, however, it could also mean that people are more keen to hang on to their properties causing the numbers of rental properties to decrease and with renters always looking to the keys to that sought after home, demand could exceed supply.
For those looking to make the jump from renting to buying and taking that first step on to the property ladder, Brexit could help you make your decision. Interest rates look to be falling which would make your mortgage payments lower and any fall in house prices may make taking that leap an attractive one.
However, as The Herald reported and as On The Market describe, construction companies are facing problems which means the supply of new housing in particular could decrease and if sellers are nervous your options for property might become limited.
Furthermore, Lucian Cook of Savills UK suggested, for example, that banks might quickly tighten their lending criteria for first time buyers. (Source: https://www.onthemarket.com/content/will-brexit-help-first-time-buyers/)
Uncertain, But Not All Doom & Gloom
While it’s true that Brexit is an unsettling political time and there is, of course, some uncertainty surrounding what it might mean for property prices in Glasgow’s West End both in the immediate future and in the years to come. However, it’s clear that it’s not all doom and gloom and there are some positives – the West End market remains relatively stable with a decreased supply keeping demand and prices strong.
Our advice is to keep yourself as informed as possible. As always, contact us at Cairn to discuss any of these matters in further detail and we will do our best to help you out.