While Theresa May survived a no-confidence vote after the biggest defeat in parliamentary history and the U.K. waits to see what the future holds for the Conservative Party, the question of if and how Brexit will impact the UK housing market still stands.
The UK currently has what has been mooted as a two-speed residential property market – London, and then the regions. Right now, London is more acutely exposed to the repercussions of Brexit, with supply rising yet sales dropping owing to buyers’ anxiety around uncertainty leading up to March 2019. Londoners are also still paying the most in stamp duty, despite being the only region seeing house prices decreasing – down by 1% at the end of Q4 2018 – the opposite to what is being witnessed outside of the capital and Home Counties. So broadly, investing in property in London right now, we would say, is not the best bet.
Moving further away from London to the regions, however, we are seeing something very different, with a rising demand for more affordable housing met by a shortage of supply, yet house prices across every region increased in Q4 of 2018, with an average year on year increase of 4.4% . Indeed, house prices in the north west of England, one of Blend Network’s key target markets, increased by 3% 2017-2018, and are on average 75% cheaper than in London .
Meanwhile, government policy is continuing to push home ownership and the construction of more affordable homes, once again one of Blend Network’s key target markets. Indeed, home ownership rates in England have been falling since 2003  despite the fact that it remains the tenure of choice for a majority of people. The 2014 British Social Attitudes survey  found that, given a free choice, 86% would prefer to buy their own home rather than rent. Within this context the Department for Communities and Local Government has reiterated its commitment to increasing levels of home ownership and driving focus to increase housing supply and make it easier for the 86% of people who say they want to own their own home, to achieve that aspiration . The Government has developed a number of schemes which are aimed at fulfilling this commitment . Yet with over 300,000 homes needing to be built annually , and less than half of this demand being met largely due to the funding gap, there is a significant shortage of supply across a number of UK regions. This shortage of supply, we believe, will remain unchanged with or without Brexit, with or without deal. It is one of UK’s most urging issues and has been described as ‘the biggest domestic policy challenge of our generation’ .
Blend Network focuses on funding experienced small and medium property developers who are looking to build more affordable homes across the UK regions outside Greater London. Check out our available loans on www.blendnetwork.com, pick and choose the ones you like most and start lending now from £1,000 to earn double-digit returns of up to 15% p.a.