THE UK HAS SPOKEN...BREXIT “side-valuation-button"

06 Jul 2016


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Many are panicking following last month’s result that the UK has voted to leave the European Union. In the wake of the announcement, the markets reacted negatively, Sterling plunged to a 30-year low and the headlines were unsettling but nearly two weeks on, things have calmed down and the FTSE 100 has hit a 10-month high! In addition, the Bank of England and the Treasury have announced that they have a contingency plan to address trickier market conditions over the coming months.

At the first sign of any economic uncertainty, the media are renowned for publishing doom and gloom headlines about the housing market and Brexit is no different. Yes, inevitably it will impact on confidence in the short-term but, it always helps to look at some of the facts to gain a sense of perspective and focus on what we know appose all the speculation.

Is property still a safe investment post Brexit?

The fundamentals of the property market have not suddenly changed:

  • People still have to move for varying reasons be it downsizing, upsizing, schools, work, separation, etc.
  • There is still a massive under-supply of housing and a desire for property ownership.
  • Property has and will always be an attractive source of investment.

Look for opportunity not negativity

Where there are surprises, there are opportunities too. Brexit may provide an opening for the UK housing market to cool and reset in areas where rising house prices are restricting first time buyers and others that want to buy property. Added to this, interest rates are at record lows and likely to reduce even further which will help to keep the market moving.

Despite housebuilders shares being among the worst hit by Brexit; Persimmon, Britain’s biggest housebuilder, commented earlier this week that “it’s too soon to know what effect the EU referendum will have on the UK new homes market” and that they “remain committed to building the new homes across the country that are needed.”

All said and done, people still need houses to live in, and in or out of the EU is not going to change this fact. Furthermore, Britain’s exit isn’t going to happen overnight; it is likely to take a good couple of years and as things stand, the UK remains part of the EU.

The property market is driven by demand and it is clear that demand for housing remains strong. The focus needs to remain on building more new homes and addressing the housing shortage.

What’s happened in the local market?

A fortnight on, we have not seen an immediate fall in prices or sales falling through but we are advising our clients who were ‘testing the market’ at a price they hoped to achieve that now may be a good time to review their asking prices. Properties that are overpriced will struggle to find a buyer over the next few months but a property that is priced correctly will attract strong interest and will sell.

With 25 years’ experience in the local property market, we are committed to helping you move. If you are thinking of selling or considering renting your property, or if you are simply seeking some advice, we would love to help. Contact the team at your local branch or pop along and speak to one of our property experts in person.

We look forward to speaking to you.

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