BREXIT has happened – What does this mean for the local property market?
I write this piece not even a week after we as a country voted to leave the EU. As property is my business I have been keeping a close watch on all of the markets and listening to what the experts are
Initially we were told of terrible consequences of leaving the EU and of property prices crashing as they did in the past. I had always felt that a lot of miss information was being pumped out by all parties and sides and so called experts.
Knowing what I do about the property market in this area I always felt confident that we would not have a major slump with the prices. Basically, we live and work in an affluent area with excellent schools that are vastly oversubscribed. We have access to a transport network that we may all moan about but does get us quickly into many London mainline stations and beyond. The local shops and businesses in the High Streets are thriving and will continue to do so if we all use them. More importantly we have a great demand for property in the South East because of these factors.
When I first heard the news that we had voted to leave I was glued to the TV and trawled the newspapers for information that was factual and unbiased! Fool! There was still so much scaremongering and doom mongers until Mark Carney, Governor of The Bank of England made his early morning speech. Him telling us that the bank was prepared for this eventuality and would do all it took to carry us through these uncertain times was good news as markets and currency always react well when a central bank speaks out like this.
The pound did take a tumble and the FTSE reacted badly but in just a short while these almost restored their pre-Brexit values. House builders have lost some of their share value as have airlines and other businesses that people feel will be directly affected. The consensus is that over time these will creep back up as people still travel abroad for holidays and business and on the house building front we still need thousands built to accommodate our ever increasing population.
A lower pound will mean cheaper exports and also make it advantageous for overseas investors to invest here. Savers will be hit again if the interest rate is cut to boost the economy and they will look again to put their money into property where it has a greater return than in the bank. This type of investment will boost the property market and keep prices stable while there is uncertainty elsewhere.
The Chancellor of The Exchequer, George Osborneâ€™s speech on the Friday morning of Brexit also restored confidence in me that there had been contingency plans for a Brexit vote. Before the vote he had announced there would be a post Brexit budget where we would all suffer! Apparently this is now not going to happen and there are plans and budgets in place to cover the changing economy.
As I am writing this I have not had any one pull out of their purchase or sale and other agents have reported the same to me. Even if we do have a bit of levelling out in the market or a small dip it is all relative. If you are selling your house for a percentage lower than it has been then the house you are buying will probably be reduced by the same percentage.
First time buyers are still very active and there will always be reasons why people have to move. Births, deaths, marriages and divorce are some of the reasons people move and whether we are in the EU or not these things will still happen regardless.
Mortgage companies have already started to offer some great deals with really competitive rates which is also a good sign for the housing market. This will help steady any nerves and give people the stability when locked into 2, 3 or 5 year deals.
Politicians are fighting between themselves; political parties may change and evolve over the coming months and years but the world is still turning, the sun still shines (sometimes!) and business is continuing to be done. It will take a few years for us to fully understand the consequences of this referendum but it does seem that for the time being it is business as usual here.
These are my personal views and I am not an economist but should you wish to discuss this with me please do not hesitate to call me at the office.
If you want to see if Brexit has affected the value of your property have a quick look at our online valuation tool. For a further more in-depth valuation I am always happy to come out and discuss your property and where it sits both value wise and what appeal it will have with potential purchasers.