Whichever way you fall on the Brexit debate, we can probably all agree that the issue has dominated the country like nothing else. From the housing market, to food shopping to passport applications… there seems to be no end to its influence.
One of the big issues with Brexit preparations is the associated uncertainty. Nobody knows when or how the big British exit is going to take place, or even how much it might affect us when it does.
It’s not surprising that this uncertainty has made us, well, uncertain. Huge numbers of people who’d quite like to start dipping their toes in the housing market have shied away from doing so in the last few years. A fair part of this caution is due to some of the financial commentators who’ve made big bad market predictions and given us all a scare.
But are these predictions something we should be taking seriously, or are they just horror stories? And if you’ve found the house, should you let the shadow of Brexit put you off?
What predictions have been made about the property market post-Brexit?
The prediction that’s really got people uncomfortable is the Bank of England governor Mark Carney’s concern that house prices could drop 35% in the wake of a no deal Brexit.
It’s well worth noting that there have been far more positive predictions, including Halifax’s expectation that the market will grow between 2-4% in 2019, assuming a favourable Brexit withdrawal agreement.
The reality here is that all manner of predictions have been made, but there’s no real way of telling which way things are going to go. The property market prognosis is very different depending on whether we end up with a soft Brexit or a hard one. And even then, it’s all just speculation by men in suits.
What’s actually happening in the housing market right now?
The market is very mixed at the moment. In some parts of the country things are booming, while in others things seem to have slowed down considerably. There have been reports of more people selling ‘off market’ with sites like Invisible Homes popping up to help you do just that.
There is a general feeling of uncertainty which is affecting how brave people feel about big moves. Some of the people who can wait it out are doing so until they feel more confident in the immediate future of the market.
There’s also been a big drop in the number of overseas buyers. Stephanie McMahon, head of research at estate agent Strutt & Parker says ‘We’re seeing less activity from international buyers. UK domestic buyers are now 80 per cent of London transactions.’
Is it all bad news?
The honest answer here is a resounding no! The market may be blighted with more uncertainty than usual, but it’s certainly not all bad.
In fact, the overall picture is a lot rosier than the media may have us believe.
There were a total of 99,420 residential transactions in April 2019, which was 0.8% more than the number of transactions for April 2018. This growth might be small, but it’s definitely there. And clear proof that we’re not all adopting the cautious ‘wait and see’ approach.
Many industry insiders are looking at the current market as a real place of opportunity. If you know what you’re looking for, now could be a great time to secure your ideal property at a sensible price.
How can we make sure things stay positive?
Our personal view on the property market is the same now as it’s always been: if we put our trust in it, the market will regulate itself.
We British have always put a lot of value on the idea of owning property. Homeownership is a badge of honour for us, and that isn’t going to change any time soon. As a country we’re much happier keeping our money in property than in other investments, and there’s absolutely no reason to believe Brexit will cause a fundamental shift in this.
Confident sellers and buyers will help keep the market buoyant. The more positive we are, the more positively the market will reflect this.
There’s also a sense that the housing market is a cycle, and it’ll continue on and on ad infinitum. It’s true that growth has slowed down over the past few years, but experts believe this is in response to rapid growth earlier in the decade rather than an impending sense of Brexit doom.
So… should you buy that house?
Of course we would never tell you what you should and shouldn’t do. We’re solicitors, not fortune tellers! Buying a property is a huge investment that requires a lot of careful thought and number crunching.
Whether you’re buying a family home to live in, or whether you’re thinking of getting an investment property or two under your belt, what we will say is don’t let the shadow of Brexit put you off making an offer. After all, if you find a property you love at a price you can afford, is it ever really the ‘wrong’ time to buy it?
If you do decide to step into the sunshine and make a purchase, we’re always on hand to help make sure everything goes as smoothly as possible. Drop us a line and we’ll get chatting.