Brexit transition period: change, or just more of the same?

Despite still being in the transition period after leaving the EU on January 31, we are seeing an upturn in the market.

Boris Johnson thinks that the transition period could last until the end of 2020, and while everyone is aware how much work is to be done, a sense of optimism has washed over the property market.

Between mid-December and mid-January this year, there were 1.3 million new buyer enquiries, a 15% increase year-on-year, according to Rightmove.

The increase in the number of buyer enquiries, alongside a 2.3% monthly increase in the price of properties coming to the market shows that there certainly seems to be more optimism in the market. This 2.3% property price increase is also the biggest monthly surge ever recorded for this time of year.

However, as last week shows, nothing stays the same for long when it comes to the government. Ester McVey was sacked from the role of Housing Minster after just seven months in the position. Her successor, Christopher Pincher, looks to be an interesting appointment, and it’s likely that Pincher will prioritise regulation of agents.

Rishi Sunak has also been appointed as Chancellor, which could be a positive boost for the housing sector. Sunak was parliamentary under sectary of the state at the Ministry of Housing Communities and Local Government from January 2018. He also sat on the committee that scrutinised the hotly discussed Tenant Fees Bill, so has an active interest in housing policies and progress.

So, what can we expect for the next few months during this transition period?

It’s anticipated that there will be another SDLT surcharge, which is expected to be confirmed in the March Budget. This will apply to overseas investment buyers living outside the UK and could potentially have an impact on the rental market.

Landlords are likely to see more uncertainty in the market as while well established landlords with capitalised portfolios could be set to fare reasonably well, landlords reliant on finance could find uncertain conditions more troubling.

A base rate cut is also looking increasingly likely for the Budget, which could cause a continued influx of first-time buyers into the market and another upturn.

This may mean that some popular areas see an increase in house prices, and clarity on the expected trade deals is also likely to cause a further influx in the market.

While the future still very much remains unknown, we do seem to be heading towards more certainty and the market is continuing to progress.

Hopefully Christopher Pincher is able to get a grip on the role as Housing Minister and make more of a positive impact than his recent predecessors. 

*Ellie Donaghy is head of lettings at Andrews Property Group