Impact of Brexit on UK economy
Currently, the total value of the UK housing markets is more than £7.14 trillion. Some of the key economists, financial organizations and journalists were surveyed by Bloomberg News, and the views of 10 economists were recorded who said they did not agree with the remarks of BOE Governor Mark Carney’s of plunge in home prices by thirty-five percent in three years in case of no-deal, in one of the worst situations. Savills believes such could be one of the extreme situations where the financial stability of the country becomes an issue. Seven out of ten economists said the prices will gain in the range of 5 to 10 percent, even in the conditions of soft Brexit, and two said the prices will gain more than 10 percent and only 1 felt the prices may flatten or decline.
Most investors believe Brexit has been responsible for creating uncertainty in the market where some impact on the economy will be felt due to regulatory transformations leading to low job creation, affordability and tax issues. The worst fall in prices was witnessed in 2007 when the prices fell by 19 percent in the Q3 2007 to the Q1 2009. Experts do not agree the housing prices will plunge in the coming months by more than 10 percent, even in the worst of conditions.
Rightmove said the prices grew 0.7 percent in the month of September and sales were predominantly higher in most of the regions and Nationwide said August asking prices grew and buy to let property for sale in the UK.
Experts find the prices in Central London will grow at the rate of 4.7 percent in the next five years and the rates in Greater London will grow at 12 percent rate.
Fresh supply needed in some regions
The government needs to improve housing in cities such as Liverpool and Manchester and replace the existing stock with new. The growth of city such as Manchester was restricted by poor housing supply for the new workers in the city that includes the millennials and the Gen Z. This study was concluded by Colliers International where it is found that highest number of jobs was created in sectors - media, telecom and technology, healthcare, banking, legal and government, but the housing supply fell below requirement. Also, one of the biggest problems of the growing cities is the lack of good homes at proper locations and property for sale in uk.
Proper distribution of the house is needed where everyone is able to make use of the housing supply. In another research by Sky News, UK is facing mini UK housing crisis grow where the government needs to plan fresh housing projections and create new targets to meet the growing demand of rising population in the some of the cities. The housing pressure on some growing regions such as Scotland and Northern Ireland is not due to the lack of supply but, mainly, as people are moving out of the city seeking jobs in other regions.
At the conference of UK housing associations, Prime Minister Theresa May said she would allocate extra £2billion towards social housing, to provide stable housing. The associations are preparing to secure land to build these new homes. Also, the prime minister said she remains committed to the help to buy a program to promote homeownership.
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