Defying Predictions
In the build up to the vote, the government predicted that house prices would have fallen by 18%. In reality, UK house prices grew by 35% between June 2016 and June 2024. This dramatic contrast between prediction and reality highlights the property market's underlying strength and the influence of factors beyond Brexit, particularly COVID-19 pandemic effects and monetary policy.
Currency Effects and International Investment
The devaluation of the British pound post-Brexit made UK properties more affordable for international investors, boosting investment and stabilizing prices. Prime areas like central London saw a surge in foreign interest due to the attractive currency exchange rates.
Foreign investment patterns shifted significantly after Brexit. Since 2017, overseas investors have increased their stake in the market by 49%. Investment influx from South Korea and Singapore also soared, up 337% from 2017. This demonstrates how Brexit created opportunities for non-EU investors while EU investment patterns changed.
Regional Market Variations
Brexit's impact varied dramatically across UK regions. London's property market has experienced the most visible Brexit impacts, with initial uncertainty giving way to structural adaptation as the capital repositions itself within changed economic realities whilst maintaining its global city status.
Meanwhile, regional markets often outperformed London during the post-Brexit period. Manchester, for instance, became a hub, attracting 80 FTSE 100 companies and 50 global banks. This geographic rebalancing reflects broader economic shifts away from EU-focused financial services toward domestic and international markets.
Regulatory 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.
These regulatory adjustments created both challenges and opportunities, with rental markets initially experiencing volatility before stabilizing as new patterns emerged.
Manufacturing and Supply Chain Disruption
The car industry faced more immediate and severe Brexit impacts compared to property. 70% of cars sold in the UK are imported from Europe. In 2020, despite some manufacturers introducing price protection schemes, Brexit uncertainty and coronavirus saw a total of 1.63 million cars sold, 29% less than in 2019.
Brexit fundamentally disrupted the automotive sector's integrated European supply chains. The UK automotive industry relies heavily on a "just-in-time" manufacturing model, where parts are sourced from various European countries and assembled in UK plants. Brexit introduced new challenges: Delays and Shortages – Car manufacturers faced parts shortages, increasing production costs and limiting the availability of new cars.
Tariff and Trade Complexities
On the 30th December, the UK agreed a trade deal with the EU which prevented a 10% tariff being applied to cars imported from Europe. As a result the predicted price increases on cars which would have seen consumers paying more has been avoided. However, the deal came with complex "rules of origin" requirements that continue to challenge manufacturers.
Stellantis claims it is having difficulty complying with the TCA's "rules of origin," which mandate that 40% of an electric vehicle's value-added parts must originate in the UK or EU for it to be eligible for tariff-free trade. In 2024, this bar will grow to 45%; in 2027, it will rise to 55%.
Investment and Production Impacts
The uncertainty surrounding Brexit severely impacted automotive investment. The Society of Motor Manufacturers and Traders (SMMT) reports investment in the industry was estimated as an average of £4bn a year between 2012-2015, but only £1.1bn between 2016-2019.
Several major manufacturers adjusted their UK operations. Honda closed its Swindon plant, while other manufacturers delayed or relocated investments. However, some companies have made significant commitments to UK electric vehicle production, including BMW's £600 million investment in Oxford MINI production.
Used Car Market Benefits
Paradoxically, Brexit-related new car shortages created opportunities in the used car market. According to cap hpi – a leading provider of automotive data – the average price of used cars in the UK rose by 30% between 2020 and 2022 due to supply issues. This created favorable conditions for people selling existing vehicles.
Brexit has accelerated the UK's transition toward electric vehicles as the country seeks to establish new industrial capabilities. Tata Group has announced £4 billion to build a new electric car battery factory, creating up to 4,000 jobs. The government estimates the factory will provide almost half of the battery production needed by 2030.
This transition represents both a challenge and opportunity, as the UK develops new supply chains and manufacturing capabilities independent of traditional European networks.
Both sectors demonstrate the UK economy's adaptability in face of major structural changes. What's clear is that because demand is so high, Brexit has not had the impact on prices many experts initially predicted. In fact, the UK property market after Brexit is set to improve dramatically.
Similarly, the automotive sector, while facing significant challenges, continues to contribute substantially to the UK economy. The UK automotive sector is a £100 billion+ global trading hub, and the engine room of Britain's international trade, generating £1 in every £8 the UK earns from exporting goods.
Recent data suggests both markets are finding stability in the post-Brexit environment. Recent data from HMRC revealed the number of UK residential property transactions in May 2024 was 24% higher than the same month in 2023, while the UK car market grew 2.1% up to August 2025, reaching 1,26 million units.
Brexit's impact on UK property and car markets illustrates how economic disruption can create both challenges and unexpected opportunities. While the automotive sector continues managing complex supply chain adjustments and regulatory requirements, the property market has demonstrated remarkable resilience, supported by strong domestic demand and evolving international investment patterns.
The long-term effects continue unfolding as both sectors adapt to new trading relationships, regulatory frameworks, and global economic conditions. Success in this environment requires understanding these evolving dynamics rather than relying on pre-Brexit assumptions about market behavior.
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