Back in January, bookmaker Paddy Power was offering odds on a Brexit/Leicester City/Trump treble at 3,000,000/1. This demonstrates just how unlikely the events of 2016 have been and should give you an idea of the current economic uncertainty the markets are facing. Unsurprisingly, this ongoing uncertainty has had an impact on the housing market. Though not as dramatic as some forecasters were predicting, the shockwaves have already been felt by homeowners across the UK and the ramifications of the vote are only just beginning.
If you’re thinking about selling your home or investing in property in the coming year, understanding how a Trump presidency may affect the housing market is essential. Though it’s still early days, we’re going to use our expert knowledge and experience to take an educated guess at what the next year may hold.
As soon as Trump’s win was announced, the Pound rose against the Dollar. Though it’s still a lot weaker than it was prior to the Brexit vote, it has regained a little strength and Brits are now getting a little more for their money. As relative prices will now be higher, this may put some Americans off of buying property in the UK. However, some experts are predicting an influx of US citizens may arrive in Britain in the coming months, with millions of people looking for ways to lessen the impact of Trump’s presidency.
Tighter lending criteria
In times of economic uncertainty, financial institutions often tighten their lending criteria. This can lead to a drop in the number of mortgages which are approved and therefore a slowdown in the housing market. Prospective buyers may also be less likely to part with their cash if they’re concerned about their job security or potential future earnings.
Investing in bricks and mortar
One thing that may help to drive the UK property market is that it’s seen as a safe bet. If the stock market experiences another dip like it did following Trump’s victory, investors could soon become nervous. As UK property, and London real estate in particular, is seen as secure, economic ups and downs may encourage foreign investors to look for safer alternatives to stocks and shares. Some investors may even consider migrating their portfolios from the US to the UK, something that could drive up prices and push the British market into overdrive.
With so many questions still to be answered, it’s impossible to accurately predict what a Trump presidency will mean for the UK’s property market. However, if the last few weeks are anything to go by, the coming year is sure to bring a few surprises.
To find out more about the local and national property market, or if you would like to chat about anything to do with property investment, give us a ring on Norwich 01603 567804 or send us a message.
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