Brexit and its effects on the property market
If ever there was a time when that much over used expression was applicable, that time is now ‘ Keep Calm and Carry On’, it really is the best advice to be given over the next few months.
The result of the historic referendum on the UK’s continued membership of the European Union is in and everyone now knows. As an immediate result, the Government, economy and currency have all been in turmoil, which will obviously have a knock on impact on the property markets, but Britain now has a mandate to reassert itself in global markets and renegotiate relations with Europe on its own terms.
So how will this affect the property market?
Some uncertainty is likely to slow the property market for a while, however, the ‘must movers’ will still move in line with their personal circumstances – upsizing, downsizing, relocating for work purposes or moving for schools, but in contrast, many investors and less committed buyers may sit tight to see the economic and social impact of the announcement.
The ‘wait and see’ period could lead to some price adjustments; hopefully the Government will act swiftly to avoid the property market becoming stagnant which would have a knock-on impact on the economy.
Our hope is, that whoever succeeds David Cameron will appoint a chancellor who will temper the higher stamp duty levels which have curtailed demand across the capital by up to 50 per cent and which in turn is filtering out to the south east of England.
When the new prime minister takes charge and appoints a new chancellor, the present draconian stamp duty rates could be reduced somewhat to encourage more activity in the market place.
The pound may fall, against other major currencies and whilst this may only be in the short term, it does make the UK even more attractive to overseas investors.
Many global investors will take advantage of this, just as they did in the immediate aftermath of the last financial crisis. It is also likely that major multi-national employers will wait to see how the economy pans out before making radical changes. If so, we could expect a boost to lettings markets as more overseas employees wait to see what their prospects hold before buying a home here.
When currency rates do stabilise and confidence returns to the market, the clearing economic outlook should present a great opportunity for those bold enough to seize it. We understand many buyers, sellers, landlords, tenants and investors may still have questions about where this result leaves residential property markets in our area.
At Robert Leech our experienced and dedicated professionals are always here to assist in any way we can, so if you have any property related queries please do not hesitate to contact us.