Brexit and Manchester: How will leaving the EU affect the local property market?
Despite the political focus shifting to the upcoming general election of late, Brexit still looms large on the agenda as the process of leaving the EU has officially begun.
But a deal scheduled to be agreed within the next two years, there are many unknowns. One of which is how will Brexit affect Manchester, and in particular, the local property market?
UK house prices since 2006
House prices in the UK have performed well over the last decade and responded defiantly following the market crash in 2009 to end a turbulent period, including the surprise EU referendum outcome.
And the same story can be said of Manchester, where local residents, including those even relevantly new to the Greater Manchester area, will have noticed property prices, as well as rental prices in the private sector, soar of late.
Indeed, a research report by JLL published earlier this year indicated that it expects the city’s capital value growth to reach over just over 28% over the next five years as a result of growing demand and supply. House prices across the north-west, in general, are expected to grow by 18% over the next four years. Private-sector rental demands are also expected to grow by 20.5% over the same period in Manchester.
How has the EU referendum affected market growth?
In short, the answer so far is – very little. There was a slowdown in housing transactions in the months following the referendum results, but effects on housing prices were minimal and growth has continued.
JLL’s Stephen Hogg commented that the ‘five-year forecast points to the continued strength of the residential sector in the Northern Powerhouse’.
“Manchester now offers some of the best returns in the UK and is at the forefront of the build-to-rent market in the UK regions.”
What about when we leave the EU?
A lot can change in politics and the financial markets. The calling of a snap election for the 8th June is a prime example of this. But Brexit is even harder to predict as there are so many moving parts and so many voices around the negotiating table.
However, one fact that does seem clear is that, whilst house prices remain firm, transaction levels are slowing according to the Royal Institution of Chartered Surveyors. Whilst economic issues such as the difficulty for first-time buyers to take their first steps on the property market are having an effect, the main cause of the recent buying slowdown has been cited as uncertainly over the Brexit negotiations as people ‘sit on their hands and delay purchases’.