Will there be balance after Brexit?22nd February 2019
As we edge closer and closer to Brexit, uncertainty abounds across the UK business community. Last week, the Confederation of British Industry (CBI) said that UK companies were stepping up their preparations for a no-deal Brexit.
There is understandably a lot of concern over the impact that this will have on property prices in the Exeter area, particularly after the stagnation of growth in house prices nationwide in June 2016, shortly after the referendum. Of course, this could have been partly due to the annual trend of prices growing in the spring and levelling off over the summer months. However, it cannot be ignored that the post-summer dip in growth that we are used to actually became a noticeable drop in average property prices towards the end of 2018.
Is this a natural market correction after long years of growth, or is the fact that Scotland and other UK nations have seen a steady rise in growth since summer 2017, while England has continued to stagnate, a cause for concern?
If we look at the volume of transactions in the housing market, we can get a broader view of market health since the referendum. A lower number of sales than predicted can indicate a lack of certainty in the market – not uncommon around elections, or indeed a referendum.
Encouragingly, the referendum didn’t seem to have much of an effect on the volume of property transactions. Certainly, nowhere near the effect that the introduction of the 3% stamp duty surcharge had in April 2016, first creating a boom as investors rushed to purchase buy-to-let properties, before a significant tail-off just after the legislation came into effect.
Martin Pratley, Head of our Property Department, gives his opinion on the current property climate, recommending that people do not put their lives on hold waiting to see what Brexit will do to the housing market, as property is a long term investment and short term uncertainties historically level themselves out. Instead, he suggests that “falling prices in some regions mean that it’s currently more of a buyers’ market, but most experts are confident that the market will stabilise and an upward trend in prices will return even if only at a moderate rate in the short term. For this reason, if you are looking to own a property long-term, then the time to buy is now, as although demand is falling, uncertainty about the future means that supply is tailing off too, so prices are unlikely to plunge further.”
Housing Expert and founder of the propertychecklists.co.uk website, Kate Faulkner has reassuring words for landlords, “in terms of the buy-to-let sector, demand from landlords has already reduced so it’s unlikely we’ll see further falls this year. And, while tenant fees are being banned from June, rents are likely to rise further due to lack of stock, meaning now isn’t a particularly bad time to be a landlord as long as you really understand your objectives and whether the deal stacks up both now and in the long run.”
All in all, there are many questions about the immediate future of the housing market, but most experts remain hopeful that the robust nature of this sector will, after a little uncertainty, return to a more predictable place than we feel we are in right now.