The EU Referendum and the UK Property Market

I’ve always noticed that when there’s uncertainty financially and/or politically, the property market stalls.

The EU referendum (like last year’s election) will cause some buyers (and vendors) to ‘wait and see.’   The election result last year created a sigh of relief from estate agents.  However, whilst sales up to around the £million mark happened, the top end stalled. That did surprise many.

I’ve noticed more supply available earlier this year. But, there’s not enough at the busiest levels of the market (up to £500,000 and then up to around £1m+) and the market over this value is cautious.  There is more available than this time last year – but is it selling?

People who are openly selling at the higher end of the property market, probably need to sell.  Many potential vendors are waiting (and probably have been for a long time now). 

There are always buyers who need a property and those properties that are either well located, perfect of their ‘type’ and attractively priced; will sell. Whether on or off market.  Saying this though, I am aware of properties that haven’t sold, but would have flown in recent years…

It is frustrating if you are an agent, a prospective buyer or vendor.  There’s always something that says ‘wait and see.’  Whether it is the instability of the Euro or International financial markets, politics, the UK economy in general – there will always be a ‘what if?’ in today’s fast moving world that could stop you either selling and/or buying.

If we do leave the EU, I believe that there will be a period of further instability in the property market. We could have a political leadership contest and further purchasing restrictions applied (especially to the international buyer).  As a country, we shall also be negotiating the terms of our exit – which could take up to two years. Even though economists are saying the English property market will always be attractive, we will still have an initial period of instability that will probably affect the more expensive property sales in the short term (in and out of London).

So, what do you do? 

Most of us are not property developers.  We’re looking to buy for the foreseeable future. We’re looking to settle. Weekend press reports talked about the English country house market being attractive to those looking to leave the cities and move to a different lifestyle.  I would definitely agree that house prices in the country (basically out of London) are more attractive – particularly over c. £1.3m level.

My best advice is to seek advice!  Do your research, plan your approach and work with the best advisors possible to help mitigate all possible scenarios. And then concentrate on following your dreams.

You need to ask yourself whether your lifestyle would change if we stay or if we leave the EU.  You also need to make sure that you are looking at buying a new house in the right area for you (and your family) as well as the best type of property for you.  A property that you will (all) be happy in as well as one that will turn out, over time, to be a sound investment. And this is despite the likely, ever-changing economic, social and political landscape and even with the hiked-up stamp duty levels (some agents are saying a good buy will pay itself back in increased values in a year or so (?).

One thing we can be sure of is that no-one really knows what will happen in the future. 

Leona