The Impact Of Brexit On The Housing Market

While it looked like a deal may not happen, the UK finally left the EU after a last-minute Christmas Eve trade deal. Now we are on the other side; it is time to consider what will happen to the housing market.

During the transition period, the predicted crash in property prices never really materialised, although there has been a readjustment to counter confidence in the South East and London. The housing market’s performance so far has been good news for homeowners worried about venturing into negative equity. For now, demand continues to exceed supply, and while this continues, house prices will rise.


The Impact On Development Finance

The property market has always been seen as a safe haven and leading form of property development finance, particularly in times of economic uncertainty, such as that created by the referendum or a snap General Election. The UK housing market consistently offers stability and security for medium and long-term investments. It is recognised as more reliable than investing in bonds, shares, and stocks, which is all good news for property investors and developers.

Brexit may have created a weakness in the Pound, but this encourages foreign investment in residential and commercial property. As such, house prices have continued to rise steadily since pre-referendum times. Statistics from the UK House Price Index show that as of November 2020, house prices have risen by 7.6% compared to the previous year.

It is fair to say that the COVID-19 epidemic has so far impacted the housing market more significantly than Brexit. The first national lockdown saw housing transactions drop to 40,000 in April 2020. As restrictions were eased, transactions rose to 100,000 in October 2020.

Since the summer of 2020, various factors have fuelled activity in the housing market. Low mortgage rates and bridging loan rates have facilitated activity from private owners, property investors, and developers.


Looking To The Future

Looking into the future, there is nothing to suggest that the Brexit housing market will see the growth in property prices stall. Another national lockdown continues to drive sales as people search for better lockdown experiences. The current stamp duty holiday, introduced to support buyers during the epidemic, has reduced the tax buyers must pay and will continue to have a positive effect until the holiday ends on March 31st, 2021. The housing market will likely see fewer transactions in April and May 2021, when normal stamp duty levies return.

During 2020, one in five households in the UK were part of the private rented sector. This number is expected to rise to one in four by the end of 2021. This reflects the desire of more middle-aged and retirees opting for lifestyle flexibility, which is good news for landlords and developers converting properties into HMOs (House in Multiple Occupation).

All indications so far are that the UK’s housing market is safe, property prices will rise, and the number of renters will increase.


“We have used BLG for development finance for over 8 years. During that time we have found their knowledge and expertise in the property development industry to be second to none. Their loan process, pragmatic and flexible approach to lending and flexibility when required has supported our business needs throughout the period and provided us with support to deliver new homes in Bristol and the surrounding areas.”

“As property developers you never know the curve balls that you may get and a project that is great on paper may prove a bit more tricky.  This happened to us on a project that BLG have funded and throughout they have supported us.  Our business likes to be collaborative and when we hit those tough moments it really felt like we were working as a team with BLG.  If you have a decent project you can get it funded, but what you really need is a business that is there to support and advise you as well.  For us on this project it was BLG.”

“I approached BLG Development finance with an opportunity I had in Chesham, Buckinghamshire, to build 5 new build houses in 2021. My main contact was Anil Bains who is a Director covering Asset Management. Within very quick timescales, BLG provided me with indicative quotes in regards the finance levels they could offer me. Having considered those levels, I requested a valuation to be carried out which again was dealt with swiftly. We proceeded to completion. The build went very smoothly with monthly monitoring being carried out by BLG and monthly drawdown requests dealt with in a very timely manner. Due to a difficult time generally in the market in regards selling, I was in need of a six-month extension to the loan which again was appraised very quickly and granted. Having dealt with numerous funders over the last 20 years, I can only speak highly of my personal experience with BLG and would very confidently work with them again on any future projects. “

"From our side it has also been a pleasure working with BLG and the team there. We have found you easy to deal with, proactive in resolving any minor issues that have arisen through the project and shown great flexibility in working with us as a partner. We will certainly like to work with you on future partners."

“I really appreciate your hard work. We really like the way you communicate & I must say I haven't seen many people who are that approachable.”

“A very efficient processing team, dealing with the DD once deal credit approved, through to completion”

“Many thanks for your efforts on this one and getting it approved and sorted so swiftly, very much appreciated. I am sure I will be speaking to your over the coming months.”

“We had other funding options, but chose to use BLG again, as we work well with the team, who always provide very clear information and advice with a friendly approach throughout the funding process. Very efficient and always very helpful.”

“Many thanks Anil, it’s been a real pleasure working with BLG so far.  We’re lining up the next project too”

“We would recommend all staff we have dealt with at BLG, as we are very satisfied with the team and the initial offer/terms presented, then you and the funding team, through to the draw down team at valuation stage.”

“All documents are clear and the way you keep clients informed, all the way along the funding process, is refreshing for us”

“With regard to what should be improved at BLG, we work with many lenders in our business and we do not get the help and response we have had on the two projects with all at BLG on our funding for our developments.”

“We would particularly mention Dave Edwards and Tom Pitts as being central to having a smooth working relationship and being positive and helpful at all times. Their guidance in helping us navigate the project from inception to completion was invaluable. As was their patience, particularly at the beginning. We look forward to many future projects with the BLG team.”

“We would like to express our appreciation for your support on our development in Bristol. We were very pleased that, from the outset, you shared our vision of the project to convert a dated but classical building, that had outlived its usefulness as a school, into unique luxury apartments with views overlooking the city. We found our dealings practical and streamlined. Monthly payments were processed in an efficient and timely manner.”

“BLG are very good at communicating with clients and all documents are very clear and all at BLG are always happy to help.”

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