Has Brexit affected the UK housing market?

Brexit has undeniably impacted the UK housing market, with both immediate and long-term effects that are important for homeowners, especially those at risk of repossession.

Initially, predictions around Brexit were dire, forecasting significant drops in house prices and a potential crash in the housing market. However, the actual outcomes have been more subtle. Following the Brexit vote in 2016, the UK housing market experienced resilience in some areas but faced significant challenges in others.

Since the Brexit referendum, house prices have shown an overall increase. Between July 2016 and May 2022, UK house prices grew by 32%, which is higher compared to the 22.5% growth in the equivalent period before the referendum. This growth was driven by various factors, including a surge in demand during the COVID-19 pandemic and a temporary stamp duty holiday which buoyed market activity despite initial uncertainties​.

However, the market also experienced periods of stagnation, particularly between 2017 and 2019, due to political instability and uncertainty around the terms of Brexit. This uncertainty affected buyer confidence and slowed down the market until the “Boris Bounce” post-2019 election briefly revived activity before the pandemic hit​.

One significant area where Brexit has had a negative impact is the supply chain for construction materials. The UK imports a substantial portion of its construction materials from the EU and disruptions caused by Brexit have led to increased costs and delays. This is particularly concerning for new housing developments and essential repairs, which are now more expensive and time-consuming.​

The labour market has also been affected, with a notable reduction in the availability of workers from the EU. This shortage has further strained the construction industry, slowing down building projects and increasing costs, which indirectly affects house prices and availability.

For homeowners at risk of repossession, these broader market trends can have mixed effects. On one hand, rising house prices could potentially increase the equity in their homes, providing an opportunity to sell and settle their debts. On the other hand, higher costs of living, increased interest rates and economic uncertainty can exacerbate financial stress, making it harder to keep up with mortgage payments.

Moreover, the increased cost of borrowing due to higher interest rates post-Brexit adds an additional burden. Homeowners with variable rate mortgages or those looking to refinance may find themselves facing higher monthly payments, which could push some closer to the brink of repossession.

The future of the UK housing market post-Brexit involves gradual normalisation. However, challenges remain, especially with ongoing economic uncertainties and potential further disruptions in the supply chain. For homeowners at risk of repossession, staying informed about market trends and seeking timely financial advice is forever important.

While Brexit has not caused the housing market crash that some predicted, it has introduced significant challenges, particularly related to supply chains, labour shortages and economic uncertainty. These factors collectively impact homeowners, especially those facing financial difficulties. For those at risk of repossession, proactive measures and seeking professional guidance are more important than ever.

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