Post-Referendum Property News
The UK’s decision to leave the European Union has sent ripples of uncertainty through the property market, as through many other industry sectors at home and abroad.
Predictions of a slump in the housing market are just that - predictions, with many of the newspaper headlines being more sensational than they should be. There are conflicting reports and opinions, and for every argument that spells disaster there’s another that sees ultimate triumph.
So where does that leave prospective buyers or sellers? Here are the facts as we see them:
The UK Property Market is Strong
The national housing shortage has underpinned the sustained growth in house prices over many years, and that issue remains whether we are part of the European Union or not. While there may be some current uncertainty regarding house prices, ongoing demand will ensure it’s short-term and we’ll see a rapid recovery.
What happens in London tends to be reflected across the rest of the country to a certain extent, and most of the reports coming out of the London housing market suggest foreign investment is actually up. Current property owners may find it slightly easier to sell, and first time buyers will give a boost to the market should there be a temporary dip in value.
Potentially Cheaper Mortgages
Despite reports from some quarters that interest rates will rise, some money experts such as David Lewis, the founder of the popular money saving website, says this is unlikely. While acknowledging that it is impossible to predict with absolute precision, his thoughts are that interest rates are likely to stay as they are or even go down. A cut in interest rates could prevent the economic downturn some are predicting, since lower interest rates encourage spending over saving.
Mortgage rates generally follow interest rates along with the long-term view of the market, so expert reasoning is that a fall in our currency value could lead to greater downward pressure on rates, and cheaper mortgages.
Fears of a Recession That Probably Won’t Happen
Depending which economic experts you listen to, you could believe Britain is heading for disaster and growth simultaneously. But even Alistair Wilson, the head of sovereign ratings at Moody’s (the investor service that recently cut the U.K.’S outlook) is reported in The Express newspaper as saying that Britain is not looking at a recession despite fear mongering amongst City businesses. He predicts growth in the UK economy of around 1.5% this year.
The biggest danger to the UK housing market is a lack of confidence amongst buyers and sellers, rather than any direct effect following the vote to leave the EU. Opinions from property experts up and down the country, including Dexter’s, one of the biggest London estate and property advisers, is that business has been normal since the referendum. They give the classic advice to ‘keep calm and carry on’. The predictions from the people who have the widest experience in how the property market behaves are that prices should hold steady this year and gradually rise next year.
Despite everything we just don’t know what will happen, so it’s important that you chose a proactive agent that helps you stay up-to-date with market.
At Enfield’s we continue to see plenty of interest in the local property market, with buyers and sellers both going ahead with current plans.
If you’re thinking of buying or selling, and have any concerns about your best course of action, we’d be very happy to give advice based on our insider knowledge of the local and national property market.