MARKET INSIGHT
The Lasting Impacts on the UK Property Market Post-Brexit
March 3, 2025 • Author: Elliot Rowe
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The UK’s departure from the European Union (EU) in 2020 was a seismic event for the economy and the UK property market. While the immediate effects of Brexit were widely debated, the long-term impact on property prices, foreign investment, supply chains, and regulations are still unfolding. This blog explores the lasting Brexit impact on the UK property market and what investors and buyers can expect in the years ahead.
1
Property Prices
The property market in the UK after Brexit faced initial uncertainty, resulting in a slowdown. However, contrary to predictions of a property crash, prices surged in the years following Brexit, driven by factors such as low interest rates, the Stamp Duty holiday, and changes in buyer preferences due to the COVID-19 pandemic. Between January 2020 and December 2022 UK house prices increased by 20.5%, a significant increase from the previous three years when prices only grew by 7.8%.
Current Price Trends
London’s prime property market saw a dip in foreign investment post-Brexit, but it remains a stronghold for ultra-high-net-worth individuals.
Regional cities such as Manchester, Birmingham, and Leeds have experienced stronger growth due to increased domestic demand and decentralization from London.
House prices have risen steadily, though economic pressures such as inflation and interest rate hikes could moderate future growth. That said, something clearly has shifted in the UK property market since 2020 with Savills now expecting UK house prices to grow, on average, by 21.6% by 2028. Huge growth when compared with the market pre-2020.
2
Foreign Investment: Shifts and New Opportunities
One of the key concerns pre-Brexit was the impact on foreign investment in the UK property market. Traditionally, EU investors were a significant part of the market, particularly in London. Following Brexit:
Some EU-based investors have pulled back due to regulatory and currency fluctuations.
Investors from Asia and the Middle East have filled the gap, capitalizing on the weaker pound and new trade agreements.
The UK government has introduced visa schemes such as the Global Talent Visa, which indirectly supports the rental and housing markets.
3
Supply Chain Disruptions and Construction Costs
The construction industry has been one of the hardest hit sectors post-Brexit due to:
Labour shortages:
The end of free movement reduced the number of EU workers in construction, leading to delays and increased costs.
Material costs:
Importing building materials has become more expensive due to customs checks, tariffs, and logistical challenges.
Housing supply concerns:
These disruptions have slowed the development of new housing projects and the pace of current ones, exacerbating the supply-demand imbalance and keeping prices high.
4
Mortgage and Lending Conditions
Brexit has influenced financial markets, leading to fluctuating mortgage rates and lending conditions. Key changes include:
Initially low interest rates post-Brexit helped keep mortgage rates attractive.
The Bank of England has since raised interest rates to combat inflation, affecting affordability for buyers.
Lending criteria have tightened, particularly for foreign buyers, as banks reassess risks in a post-Brexit economy.
5
Regulatory and Taxation Changes
Brexit has brought regulatory changes impacting the property sector, such as:
The introduction of new visa and residency requirements for EU nationals living in the UK, affecting the rental market.
Changes to property taxation, including an additional 2% Stamp Duty surcharge for non-resident buyers.
Potential divergence in property regulations from EU standards, which could impact landlords and investors.
6
UK Rental Market Dynamics
The post-Brexit rental market has experienced shifts:
London’s rental market saw short-term declines as some EU nationals left, but demand rebounded due to a return to office work and increased international migration.
University towns have maintained strong rental demand due to the steady influx of international students, despite initial concerns about EU student numbers.
Rising mortgage rates have increased rental demand as homeownership becomes less affordable for some buyers, leading to record rental increases over the past five years that have yet to level off.
Conclusion: uk property market in transformation
The UK property market post-Brexit has been shaped by a combination of economic policies, global influences, and domestic demand. While Brexit introduced uncertainty, it has also created opportunities, particularly for non-EU investors and regional property markets.
Looking ahead, the market will continue evolving in response to economic conditions, regulatory shifts, and broader global trends. Whether you are a homeowner, investor, or buyer, understanding these long-term Brexit impacts will be key to navigating the UK property landscape successfully. With prices set to rise by over a fifth over the next four years, now is the perfect time to explore your options in the thriving UK property market.
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About the author
With 16 years of experience in the UK Real Estate Industry working in the UK and the Middle East, Elliot has been advising clients on leading portfolios to achieve their goals and personal targets and has built a network of high-profile investors and property professionals globally.
Associate Director
ELLIOT ROWE
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