FinanceDraft

Brexit Delay Hurts Business But Property Prices Increases

The Brexit divorce deal was again postponed and is now expected to happen on October 31. That has only added to the cautiousness of the businesses who have canceled or postponed investment plans due to uncertainty over the trading relationship with the EU. There is no foreign investment to speak of in the UK which is a further cause for worry as the country is slumping into a deeper economic crisis.

Amidst all this economic gloom comes a surprising report ‘Rightmove’ which owns a property related website. The company released the data based on the property adds that it got on the website. According to the survey conducted the asking property prices in the United Kingdom rose over the past year showing early indications of a revival in the housing market. The survey also suggested that the property market may have averted the slowdown even as the country awaits the result of the Brexit deal.

The Brexit ordeal which started in 2016 had made the property market shed its prices and also growth was slow till the first quarter of 2019 where it started to slowly stabilize.

The asking prices rose by 1.1% month on month and were seen as a rise bigger than normal, and as per the Rightmove director Miles Shipside, the delay in the country’s exit from the EU could induce the house hunters into buying. He said,

“We are not anticipating an activity surge, but maybe a wave of relief that releases some pent-up demand to take advantage of static property prices and cheap fixed-rate mortgages.”

The ever decreasing value of the pound which has reduced by almost 15% when compared to other currencies and the rise in import costs has hurt the British economy the most. That has resulted in the consumers who are an essential cog in the economic growth of the country becoming more restrained in spending. The inflation has also risen which has neither helped the economy nor consumer spending which has resulted in the British economy reducing by 2.5% that it would have if the country had not voted out of EU.

Many economists believe that the UK missed out on the growth story in the early 2017 and 2018 which has costed the country’s economy by a sizable margin. Britain is yet to meet its delayed Brexit deadline of April 12 and there is a great risk of the country leaving the EU without a deal even on the next extended deadline of Oct 31.

 

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