The property market is bracing itself for, at best, uncertainty and confusion, and at worst a white knuckle ride after yesterday’s High Court ruling that MPs must vote on triggering Article 50.
Yesterday, as the BBC reported on the possibility of a constitutional crisis, the pound rose in value while speculation grew that Theresa May will call a snap general election.
Ladbrokes slashed its odds on a general election next year to 2/1.
Spicerhaart boss Paul Smith told EYE: “Yesterday’s government defeat by the High Court regarding whether the UK can start the process of leaving the EU is unwelcome news for the residential property market.
“This decision will elongate the process of Britain leaving the European Union reigniting cause for a lack of confidence among buyers, sellers and house-builders.
“It cannot be emphasised enough how much the residential property market is reliant on confidence, and as we currently see a market that is suffering from almost record low transactions levels, especially in the capital, it is now more important than ever that clarity is provided.
“What we need to see is a quick, clean break from the EU, rather than dragging out the process which yesterday’s ruling may now do. Britons have voted to be free of the EU, and their wishes should be respected with a clear exit strategy.
“Our property market has in the past proved robust, and bounced back in terms of adversity. However guarantees of future stability would certainly not go amiss.”
Smith also warned MPs not to abuse their votes. He said: “The people have decided on Brexit and Parliament should not stand in the way of the will of the people. Brexit means Brexit.”
Another industry figure warned that agents will “see the price of Brexit in their bottom lines”.
Property pundit and buying agent Henry Pryor yesterday told EYE: “Markets hate uncertainty so this will result in more people putting their moves on hold whilst they await clarity – something that is unlikely to come in the short term.
“Turnover and prices are sure to come under pressure, but the good news for agents is that more people will want advice rather than just process which should mean more pitches. Key to converting this into income will be to provide reassurance.
“Most home movers are trading so absolute prices are not essential if what they want to buy is cheaper. The best agents will inspire confidence and clients will respect and pay for this.
“Longer term I expect that we are all going to see the price of Brexit in our bottom line figures.
“Deals will be harder to do, harder to hold together and harder to get paid for.
“Service rather than process will count, I expect, as consumers come to appreciate that selling or letting, buying or renting, isn’t just a case of sticking something up online and processing the resulting interest.
“Whether you voted remain or leave, you are about to witness one of the more memorable episodes in the housing market and some will not cope well.
“There will be arguments, sharp practice, ill-mannered discourse, but the best firms will win out because they deliver something that the public wants and will pay for.”
More upbeat was Glynis Frew, managing director of Hunters Property Group, who said: “This decision could bring further uncertainty to the country, and a period of stability would be welcomed by the business world. However, at the end of the day the property market is essentially driven by lifestyle factors: people will continue to get married, relocate for new jobs and start families, whether Brexit goes ahead or not.
“These lifestyle changes bring with them a need to move house and therefore create churn in the market. In addition , yesterday’s announcement to hold interest rates steady is welcome news for the property sector. ”
Camilla Dell, of London buying agency Black Bricks, said: “Yesterday’s outcome will likely delay the triggering of Article 50, thus creating an even longer period of uncertainty, which isn’t helpful for sellers or buyers.
“However, the fact that Parliament needs to vote, may also mean a less harsh Brexit takes place in order to get the vote through.
“In the long run, I don’t believe it means we aren’t leaving the EU. We will be leaving, but perhaps not as quickly or as aggressively as the prime minister had hoped.”
Stephanie McMahon, head of research at Strutt & Parker, said: “We didn’t know when Article 50 would be triggered before, and after yesterday’s court case we still don’t know.
“On a positive note, it is good news that formal exit negotiations with the EU will be properly debated, as they should be.
“On the other hand, a further hearing is expected later this month and because the ruling is likely to go back to appeal, we can’t really comment on the potential impact at the moment. Our forecast for UK house price growth in 2016 is 5%, and we are predicting the same 5% for 2017.”
Some will inevitably choose not to move as a result. However, those who do not need to move but wish to may use the uncertainty to delay but most will see a flat market as a perfect opportunity to make a well-balanced decision in a market where they are unlikely to be rushed or forced to make snap decisions. There is likely to be a further drop in volumes, though these are already at an historic low and so, I believe, the most likely casualty of a further drop in volumes will be those agents who rely on high turnover and cheap fees or, the fixed price call-centre/ hybrid agents who don’t actively ‘sell’ customers property at all but require ever increasing listing numbers to make profit.
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Yawn, Coffee please,
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And the world will come to an end any day now.
Let’s stop over egging the pudding. There is tons of business out there. We just have to stay positive. All this negative bo**ocks will bring the industry down. None of the disasters that were due to befall us immediately brexit was announced have not occurred, nor will they. Britain is robust,envied overseas and is a major world wide hub for business.
None of that will fundamentally change going forward. Believe that and get on with making this market work. It’s there.
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Here here typhoon….
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more tiresome pro Brexit rubbish from Paul. What the economy and the property market need now is for us to remain in the EU. The pound will recoup it’s 20% loss, inflation won’t of up to 4%, people will have more disposable income, and the property market will be buoyant once more.
it’s ironic that the Brexiteers who spent the entire campaign arguing that British courts must be sovereign and no longer subjugated to Brussels, are calling foul on the decision that MPs must vote off the back of the opinion poll that was the referendum!
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Interestingly if there is a vote in two to three years time on the exit package, I wonder how the result will be altered by a change in the voting dynamics of two more years of young people being eligible to vote……Add in those who voted Brexit and have since regretted doing so, because it’s quite clear the NHS is never going to be given any extra money off the result…. despite the promises…and prices are going up in the shops.
Its going to be a very interesting end game.
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Forget Brexit. In simple terms, property has become ridiculously unaffordable again. Remember 2007/2008? It’s that old ten year cycle.
Without any doubt the market will crash next year. Agents closing, repossessions filling our diaries, potential sellers sitting tight and first time buyers renting.
It would have happened without Brexit. Brexit’s just going to make it worse. 25% down by the end of 2018. Can no one see it coming? Wake up and smell the coffee guys! x
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There is no doubt that in our area prices have been pushed up in the last couple of years by a lack of supply…but is that same lack of supply not going to hold things steady as well? Wouldn’t it take a turn around with more supply than demand to trigger a significant fall?
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Agents braced for months of Brexit uncertainty and confusion
Agents braced for months of Referendum uncertainty and confusion
Agents braced for months of quantative easing uncertainty and confusion
Agents braced for months of Sub Prime scandal uncertainty and confusion
Agents braced for months of over heated property market uncertainty and confusion
Poor estate agents: Always so uncertain !!!!
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Worse thing that could have happened. Isn’t this all sour grapes by those who are anti-Brexit trying to derail democracy. Listen to the argument for not allowing every Tom, Dick and Harry being told what we will be doing. No general ever won a war by letting his enemy know his plans. The court of appeal needs to use sense. Those that lost the vote, lost, get over it. That is democracy. They would be the first to complain if roles were reversed. As for the story its not just property that will go on hold. The implications can be far more damaging for our economy as many business will worry and sit and wait … not good. Short swift action is the road to success.
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Yes, let’s forget UK law and work outside the system because a quarter of the population voted for it.
The High Court have given their judgement because parliament is sovereign and referendums are generally non binding in the UK.
An exception was the 2011 referendum on changing the electoral system to alternative vote, where the relevant legislation obligated the government to change the law to reflect a “yes” vote had that occurred. No such provision was contained within the EU referendum legislation.
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Actually is was around 37.2% of those eligible to vote whilst remain had approximately 36.2%. Maybe if the apathetic 27% or so who didn’t vote had gotten off their backsides remain would have won. Who knows?
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I respect anyone comments on this subject. I’m just pointing out facts. It may very well a poor turn out but that was the turn out and that was the result. That is democracy. One could say more may have voted in or possibly out? The issue is we are going out and the delay and telling the world how we go about it is not the way forward. If we do YOU will loose, just as much me I.
If you think we have a problem, wait and see if Trump the multi-bankrupted succeeds!
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The market will go up, the market will go down.
Competent agents will handle their business competently, deficient people will still be deficient.
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Uncertainty leads to a reduction in the number of transactions.
Fewer properties on the market leads to lower fees because each agency becomes desperate for the next instruction.
Bizarrely we’ll probably see prices going up or staying the same.
Less business for less money.
That sounds like fun!
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Agreed
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We all have to up our game plan to win a bigger slice of a smaller pie.
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In a dog eat dog market, be the lion.
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Always be the lion.
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