There are number of risks and assumptions being made surrounding Brexit due to the myriad of possible outcomes and types of deal. Whilst there is still a slight chance that Brexit could be completely stopped; it seems highly unlikely. Another unlikely outcome is a ‘no-deal Brexit’, where the UK would leave on the proposed deadline without any form of agreement in place with the EU, however current Prime Minister Boris Johnson recently claimed that there is ‘absolutely zero’ risk of a no-deal Brexit. The most likely scenario is for the UK to leave the EU with a deal in place, but the kind of deal could vary. A softer Brexit deal could see the UK accept the four freedoms of the EU and continue trading with them in a similar way to now, however a harsher Brexit could be very similar to a ‘no deal’ Brexit, wherein the UK and EU will agree to trade under the World Trade Organisation rules.
Despite the uncertainty when it comes to the conclusion of Brexit and what exactly is going to happen come January 31, the property market has continued to remain strong throughout the entirety of the process, with one of the strongest areas in the market being the North. According to a recent report by JLL, the housing markets in the North West and Yorkshire & The Humber have performed above the national average over the past 12 months. The report also states that transaction volumes in both regions are in line with levels prior to the EU Referendum in June 2016. JLL state that the average house price in the North West was £165,000 as at Q3 2018, having increased by 4.9% compared with the prior year.
In Yorkshire & The Humber prices increased by 4.4% to £164,000 in the year to Q3 2018. During the same timeframe, average UK house prices increased by just 2.7% and JLL forecast that Northern cities will continue in this vein. JLL have forecast that Manchester, Leeds and Liverpool are all expected to see price and rental growth above the UK average over the next five years. Central house prices in Leeds are expected to grow by 17% in the next five years, followed by Manchester at 16% and Liverpool at 13% compared with a national average of 11%.
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