Property Prices After Brexit – the Complete Guide

Brexit House Prices 2021 to 2022 

Brexit and the housing market have had an interesting relationship over the last few years.  

It’s now been over a year since the UK took the bold step to leave the EU at the start of 2021. 

Since then, a great deal has happened to the Brexit property market, with huge property price fluctuations seen across the UK.  

While a strong factor for these changes has undoubtedly been the economic impact of Covid-19, it’s interesting to see just how house prices have performed following the UK’s exit from the EU/ 

According to the latest Land Registry data, the average UK property is valued at £268,349. 

This is a whopping 10.17% higher than 12 months prior and is over £18,000 more expensive than in January 2021. 

As you can see from the graph, post-Brexit house prices have had a huge boom over the last year or so.  

Looking at the graph, there were some large variations in prices, but growth was incredibly high from January 2021 to October 2021 (the latest available data at the time of writing). 

2021 was a record-breaking year for the property, with Nationwide reporting that UK house prices had increased by the highest level in 15 years, finishing the year at the highest average house price on record. 

While these prices were likely not impacted by Brexit, and instead were entirely influenced by a newfound appetite to move homes post Covid, it does show that Brexit has had little impact on property market performance. 

The housing market Brexit performed incredibly well in 2021, perhaps easing the anxiety of those asking, “will house prices crash after Brexit?” or “will house prices drop after Brexit?”  

In fact, if you wanted to know “will house prices go up after Brexit?” the data suggests that there is set to be an even higher level of growth over the coming years.  

Will House Prices Rise After Brexit? House Price Predictions Post Brexit  

Post Brexit house prices have experienced an astronomical rise over the past year. 

One of the main contributing factors to this rise has been the tax savings on offer due to the stamp duty tax holiday (which ended in October 2021), alongside a new wave of people wanting to move homes after lockdown. 

Growth was so dramatic in 2021, in fact, that in a report by the BBC, the managing director of estate agents Fine & Country said:  

“This market is moving so fast that if you blink, it increases in value, […] and it could be about to get even busier.”  

We’re now in 2022, however, and most experts agree that the level of growth seen in the 2021 market will likely decrease in 2022 – although significant growth is still expected.  

Predictions from industry experts Savills have found that property prices are set to increase by up to 18.8% in UK regions by 2026. 

This growth rate fluctuates heavily throughout the country, with the North West set to see prices rise by 18.8%, while London will see prices rise by just 5.6%. 

It’s important to note that these growth levels could far exceed the predictions, with uncertainty surrounding Omicron and other Covid variants potentially leading to another housing market boom in 2022. 

These strong growth levels are a far cry away from what was previously expected by industry experts. 

Many experts believed that Brexit would strongly impact property prices, with one bold claim from the Bank of England anticipating a 35% drop in house prices after Brexit.  

Surprisingly, property prices are increasing at their highest level in decades.  

The Brexit effect on house prices in 2021 has seemingly been positive, with price growth showing no signs of stopping in 2022. 

Brexit and House Prices in 2016 to 2021: An Economic Impact 

To get a complete picture of house prices and Brexit, it’s essential to look at the months and years following the original 2016 vote.  

Every month after the initial Brexit vote, a significant drop in Brexit house prices was anticipated.  

Many Remainers were fearful of the significant economic impact that could result from the UK’s withdrawal. Some were asking, “will house prices drop after Brexit?” and “will Brexit affect house prices?”  

So, what actually happened in the months following the Brexit vote?   

While the UK economy did slow down throughout the second half of 2016, the country’s property market didn’t immediately suffer from the so-called ‘Brexit Armageddon’ initially feared.   

The GBP had one of the most significant drops that the UK economy has experienced after the Brexit vote, with the pound sinking to a 31-year low against the dollar on Wednesday 6 July 2016.    

By 24 August, however, the pound rose to £1.32 against the US dollar – the highest rate it had been at in three weeks.  

While the economy certainly had its ups and downs during the next few years, this wasn’t seen in house prices after Brexit, with a continued rise in value seen across the UK market.  

Brexit House Prices 2016-2021 

After months of ‘will house prices fall after Brexit?’ and ‘what will happen to property prices after Brexit?’, it became obvious that fears for the property market were unfounded.   

While there was an initial lull in price growth during the months following the Brexit vote, prices started to recover quickly.  

Findings from a Bank of England regional agents survey revealed that while there was a dip in UK property market activity following 23 June, the market had proved to be far more resilient than first expected.   

According to official Land Registry data, prices between June 2016 and December 2016 increased by around £3,000.  

While this isn’t a significant rise, prices were stable, which is something many experts failed to anticipate.  

Soon after, house prices after Brexit started to increase by a much more considerable margin.  

Rent Prices Also Grew After Brexit  

These promising house prices after Brexit statistics were definitely good news to those investing in UK property.  

While many investors were asking, “what will happen to house prices after Brexit?”, there was also the question of rental prices to consider and how fluctuations in the rental market could impact buy to let investments.  

With buy to let, rental yields are one of the key factors that investors look for in their property ventures, and many were left wondering whether their rental income would be affected by the 2016 Brexit vote.   

Thankfully, this wasn’t the case, with average rental yields in the UK heavily increasing over the last five years.  

The combination of the property market and Brexit has seen rent prices increase strongly over the past few years, particularly in the Northern UK regions.  

As of January 2022, rental income has increased across the UK by around 8.3%, with the North West increasing by 9.3%, according to the HomeLet Rental Index.  

While the answers to “will the housing market crash after Brexit?” and “will Brexit affect house prices?” cannot be answered with certainty, so far the statistics suggest that the market has grown fantastically over the years.   

Overall, these growth levels suggest that the uncertainty brought on by Brexit may not damage the property market as much as many predicted.   

Judging by how well the UK property market held up following the EU Referendum vote, it’s hopeful that property prices Brexit will remain robust over the coming years.  

The Boris Bounce of 2019/20 

You may have noticed that prices in 2019 generally saw less growth than in other years.  

This was because 2019 was a significant year in the EU referendum timeline due to huge uncertainty surrounding Brexit and whether the UK would get a deal or not.  

2019 was a tense time for the UK government, with many fearful of Boris Johnson’s intentions for Brexit.   

One of the biggest concerns was with Johnson’s likelihood to promote a no-deal Brexit – causing many to worry about no deal Brexit house prices.  

However, after the Conservative Government’s sizeable victory in the December 2019 general election, a wave of certainty spread across the UK, with the economy seeing a strong uprise.  

This was referred to by many experts as the ‘Boris Bounce’.   

Since Boris Johnson won the 2019 general election with a large Tory majority, several improvements have been noted.  

As soon as the General Election result was announced in December 2019, the GBP reached a rate of 1.35 USD – the highest level it’s been at since May 2018.   

This massively increased confidence in the UK economy, especially since the GBP reached lows of 1.22 USD after Boris Johnson first became Prime Minister back in July 2019.  

At the same time, following the 2019 general election, investment sectors witnessed a significant growth in share prices.   

The share prices of FTSE 100 and FTSE 250 companies grew by 1.1% and 3.4%, while Barclays, RBS, and Lloyds all saw share prices increase by 6%, 8%, and 5%.  

Property developers and contractors in the UK also saw their share prices grow, such as Barrett and Persimmon, who reported respective increases of 14% and 12%.   

The International Monetary Fund, an international financial organisation, has even predicted that thanks to the ‘Boris bounce’, the UK will see stronger growth than Germany, Japan, and France in 2020/21.   

So, what do the house price growth figures say?  

According to Halifax data, in December 2019 house prices reportedly leapt by 1.8% compared to the previous month, boosting the annual increase to 4%.   

Additional research also shows that as of January 2020, average asking prices for properties in the UK had risen by 2.3% since 12 December.  

According to Rightmove, this increase has added around £6,785 to the value of the average UK property.  

Interestingly, this growth was the largest monthly rise for that time of the year recorded by Rightmove since 2002.  

If you’re an investor that’s wondering, ‘will house prices fall after Brexit?’ figures like these should be enough to put your worries at ease.  

How Have Housing Transactions Been Affected by Brexit? 

One of the most interesting metrics to look towards when evaluating Brexit house prices has been the level of housing transactions post-2016.  

Property prices often coincide with demand, with prices likely to surge the more demand increases.   

Many people were concerned that this level of demand and the ability to buy property would disappear due to Brexit, with fewer people having the money to spend on expensive purchases.  

Thankfully, data released by HM Revenue and Customs suggests that Brexit has had almost no measurable impact on the volume of housing transactions in the UK.  

The data shows both seasonally adjusted estimations, along with the raw data measured by the government department.  

There have been minimal changes post-2016, with a relatively consistent level of housing transactions after the referendum vote compared to before.  

In fact, the only sizeable dip was seen in April 2020, where housing transactions fell from 87,860 to 37,360 since April 2019.  

This level of drop was a direct consequence of lockdown measures put in place in March 2020.  

As you can see from the graph, though, transactions quickly recovered towards the latter end of the year, before reaching an incredible peak of 111,260 in April 2021.   

This was a 197.8% year-on-year increase in the non-seasonally adjusted data.   

Overall, aside from 2020, housing transactions have remained remarkably consistent after the June 2016 election, with no noticeable impact from Brexit.  

In fact, now that the UK has officially left the EU in 2021, housing transactions have sky rocketed.  

Although, this is likely attributed to the desire for new property caused by the three UK lockdowns and the tax savings on offer from the stamp duty tax holiday.  

Is the UK a Seller’s Market in 2022? 

Another vital metric people often use to measure the impact of house prices and Brexit is the time it takes for a property owner to sell their home.  

If a property sells fast, it shows there is a high demand for property in the UK, highlighting how strong the UK property market is.  

According to the latest Rightmove House Price Index from January 2022, the number of buyers enquiring on homes is 15% higher than January 2021, with buyer competition almost double than it was 12 months ago.  

Around 145,000 properties were newly marketed in April 2021, with the number of sales agreed rising by 55% compared to two years prior.   

The report from Rightmove notes that the number of properties available cannot meet demand, with available stock at the lowest proportion ever recorded.  

There is now a buying frenzy in the UK, with the average number of days to sell a property reaching its lowest ever level.  

Meanwhile, the number of houses selling within just one week is now at its highest recorded level.   

Perhaps the most interesting part of all this is that Rightmove believes this trend will continue for the foreseeable future, with market activity remaining robust at the start of 2022.  

The Brexit Timeline- What’s Happened So Far? 

There’s no denying that Brexit, and the negotiations involved, have been a long and tiresome process.   

If you want to refresh your memory on what exactly happened from 2016 to 2021, here’s a complete Brexit timeline.  

22 February 2016  

The Date for the EU Referendum Vote Announced  

In February 2016, David Cameron announced that the UK would vote in an EU Referendum on 23 June, officially launching the Brexit campaign.  

∇  

23 June 2016  

UK Votes to Leave the EU  

In June 2016, the UK voted to leave the EU, with the leave campaign having won by 51.9% to 48.1%. David Cameron announced his resignation as prime minister the following day.   

∇  

13 July 2016  

Theresa May Announced as Prime Minister  

Less than a month after the Brexit vote, Theresa May was appointed as the new Prime Minister, having won the Conservative Party leadership contest by default.  

∇  

29 March 2017  

May Triggered Article 50 of the Lisbon Treaty  

On 29 March 2017, Theresa May triggered article 50 of the Lisbon Treaty, prompting Brexit with a notice period of two years.  

∇  

18 April 2017  

Theresa May Announced Plans to Hold a Snap General Election  

Theresa May called a snap general election in a bid to increase her authority in both the House of Commons and the public eye.   

∇  

8 June 2017  

General Election Saw May Lose Majority and Make a Deal With the DUP  

The final result of the 2017 general election saw no seats win a majority. As a result, Theresa May was forced to make a deal with the DUP in order to stay in power.  

∇  

15 January 2019  

May’s Withdrawal Deal Draft Rejected  

In January 2019, the UK Parliament held a vote to decide whether or not they accepted the Withdrawal Deal offered by Theresa May. This deal was rejected with just 202 votes for and 432 votes against.  

∇  

13 March 2019  

MPs Say No to a No-Deal Brexit  

Parliament voted in favour of a motion which aimed to rule out the UK leaving the EU without a deal, although the result of this vote was not legally binding.  

∇  

10 April 2019  

Deadline Pushed Back to 31 October  

Despite the aim to leave the EU on 29 March 2019, a new Brexit deadline of 31 October was announced due to the fact that Theresa May’s withdrawal agreement was rejected three times in total.  

∇  

24 May 2019  

Theresa May Resigned as PM  

On the 24 May 2019, Theresa May announced that she was standing down as Prime Minister. On 24 July, May headed to Buckingham Palace to tender her resignation to the Queen.  

24 July 2019  

Boris Johnson New PM  

Boris Johnson is appointed as the new leader of the Conservative party, now heading up the Brexit campaign.  

∇  

29 October 2019  

UK Parliament Approved General Election  

In a similar turn of events to the 2017 election, Boris Johnson called for another snap general election. Parliament approved this and a new election campaign is launched ahead of the December election.  

∇  

12 December 2019  

Boris Wins Majority  

Boris Johnson won the 2019 general election with a comfortable majority of 365 seats. This reignited the nation’s confidence in both the UK government and Brexit as a whole, causing experts to predict that after Brexit, property prices would remain stable.  

∇  

9 January 2020  

MPs Back Withdrawal Agreement Bill  

The Commons voted 330 to 231 in favour of Boris Johnson’s Withdrawal Agreement Bill – the bill that will implement the UK’s Brexit deal.  

∇  

31 January 2020  

Departure Day  

The UK departed from the EU at 11 pm on 31 January 2020. The country has now reached the Brexit transition period before all agreements between the EU and the UK are made by the end of the year.  

∇  

2 March 2020  

Trade Talks Begin  

Trade talks officially begin in Brussels. Talks are set to continue every two weeks until a Brexit trade deal can be reached.  

∇  

19 March 2020  

Pressure to Delay Brexit  

Chief negotiator, Michel Barnier, reveals he’s caught Coronavirus. which prompts pressure to delay Brexit talks due to the ongoing Covid-19 pandemic.  

∇  

17 May 2020  

EU Urged to Show Flexibility  

Michael Gove urges the EU to show ‘flexibility’, as signs continue to point towards a no deal Brexit.  

∇  

13 June 2020  

Support for Transition Period Extension  

A survey reveals that over half of Britons support a Brexit transition period extension, while three-quarters of British people believe that the UK should work closely with the EU to combat coronavirus.  

∇  

21 August 2020  

UK Will Not Extend Trade Talks  

Negotiator Michael Barnier states that he believes a UK-EU Brexit trade deal is ‘unlikely’. The UK says it will not extend trade talks, even if an agreement cannot be reached by the 31st December deadline.  

∇  

23 October 2020  

Trade Talks Continue in London  

Trade talks continue as negotiators meet in London. Liz Truss, International Trade Secretary, insists that a deal can still be done due to a new round of intensified daily meetings.  

∇  

24 December 2020  

UK and EU Agree on a Post-Brexit Trade Deal  

After months of negotiations, a deal is finally agreed on, prior to the end of the transition period on the 31 December.  

∇  

31 December 2020  

UK Leaves EU After Transition Period  

After five long years, the UK officially left the EU single market and customs union at 11pm. 

Brexit and House Prices: What About Mortgage Rates? 

Both homebuyers and investors are curious about not only house prices after Brexit, but also mortgage rates, and how mortgages will be affected in 2022.  

Over 2020 and 2021, mortgages have changed in line with the coronavirus pandemic.   

The majority of lenders began to close their 95% mortgages, which were common with first-time buyers.  

While 2020 and 2021 have brought issues for first-time buyers who favour affordability when agreeing on a mortgage deposit deal, things have looked up for investors and those buying a second home.   

This group of buyers were able to benefit from some large savings through the stamp duty holiday.   

The stamp duty holiday was announced in July 2020, and allowed those buying a second property to save money on stamp duty tax.  

The announcement of this tax break helped to boost UK housing market activity, which has also caused mortgage rates to rise due to demand.  

Mortgage rates have fluctuated throughout the year, and despite high levels of demand remaining, rates are currently low, which is good news for those seeking a residential or buy to let mortgage.   

The holiday ended in October 2021, with tax rates now reverting to pre-pandemic levels. 

If you want to learn more, be sure to check out our stamp duty guide.  

Experts have suggested that mortgage rates should remain promising following Brexit, which will hopefully encourage more market activity throughout 2022 and beyond.  

The Effect of Covid-19 on Brexit and House Prices 

The threat of Covid-19’s impact on the UK economy and property market has somewhat overtaken Brexit uncertainty.   

But just how much impact will the combination of the Coronavirus pandemic and Brexit have on the UK property market and house prices after Brexit?  

While Covid-19 has undoubtedly had a big impact on the UK economy, with many people out of work and many businesses failing, the outlook for the UK property market remains positive.   

With the average UK property price now at a record high, the UK property market has experienced a similar resurgence during the Coronavirus pandemic as it did back in October 2016 following the initial Brexit vote.   

Hopefully, the UK property market will follow a similar pattern over the coming years as it did following Brexit uncertainty.   

With predictions for huge growth in property prices in the coming years, property market predictions for 2022  and beyond look promising in the face of both the Covid-19 aftermath and the outcome of Brexit house prices.   

Savills, for example, released updated property price predictions which estimate that UK property prices will grow by 13.1% by 2026.   

Within the same period, an even higher growth of 18.8% is expected for the North West and the Yorkshire and the Humber regions.