Prime Minister Boris Johnson concurred with a Brexit deal on 24 December 2020, with the European Union (EU), posing challenges for businesses in either direction between the EU and U.K.
With the end of the 11-month transition period on December 31, 2020, the ongoing EU-U.K. relationship is governed by a Trade and Cooperation Agreement (TCA) and the EU Withdrawal Agreement.
Trade between the EU and U.K. will be unlike under the TCA than it was as an EU member state.
From the housing market’s perspective, there is a disconnectedness from the laws related to property ownership and conveyance of property in the England, Scotland, and Wales. Commercially, the UK property market, is exposed to any uncertainty that comes its way. Here are some of the key issues for the post-Brexit housing market.
House Prices
The current housing market situation in Britain has challenges to face like EU regulations, rise in house prices, alongside a drop in wages. Uncertainty looms over investors and developers with fears of volatility that can push prices that had escalated 10% in 2015 even higher.
Cost of Investment
The cost of investment in property funds is likely to drop as the presupposition between participants and observers that the valuations in the U.K. commercial property can encounter a short-term downward pressure. Additionally, property funds might fluctuate from monthly to weekly valuations to cushion volatility. Open-ended property funds can face concerns with return of investment depending on the value of the said property.
Relocation
The home-buying process poses challenges with the finalization of reciprocal agreements between the EU and U.K.
U.K. nationals living in the EU countries may require to remain in their choice of country for five years, starting January 1, 2020 with a registration under a settlement scheme. In the 5-year period, U.K. citizens can spend up to 6 months of every one year outside their country of residence. Notably, U.S. citizens will require to apply for a Visa for work and residence purposes. They may face with immigration rules of the choice of country they wish to relocate, compromising free movement.
Conclusion: In 2021, the implications of Brexit on the housing markets, investors, and spectators will play out as time unfolds. The property sector is on close monitoring to match the changes at every step and identifying where new negotiations and opportunities lie.
