There is no doubt that Brexit has already had an impact on the property market with many adopting a wait-and-see approach until the final deal has been made. As March 2019 and a final decision edges closer, many people are wondering whether they should take advantage of the current situation and buy or trade up, while house prices have subsided. On the other hand, some people are conscious that a hard Brexit could see the housing market slow down and are trying to decide whether now is a good time to sell.
We asked Members of The Guild to give their advice about what they think homeowners should do. Here’s what they said:
Andy Goundry of Goundrys said: “Interestingly, where we are in Mid Cornwall, it appears that people have taken two different views. We have had potential buyers saying they will wait until the uncertainty is over as they feel prices may well reduce and so they will wait. Conversely, we have had some sellers place their property on the market in the hope if they sell now, they may obtain a better price than if they wait until next year. In our area, as always, it remains a case of supply and demand. We have seen a decrease in the number of buyers. However, the dearth of available property still means that a realistically priced property is agreeing a sale within a matter of days.”
Andy adds that if people are trading up or down, then it remains a matter of relative price differential and makes little difference whether that is in a falling or rising market. “Certainly, if the property isn’t on the market, then I guarantee it won’t sell!”
Director of Maguire Jackson in Birmingham, Philip Jackson, says that the Brexit question has undoubtedly injected some caution in recent weeks into the local market, taking some of the projected growth out of the market. “However, it hasn’t completely stopped the annual growth we have witnessed over the past three years. There are indications this autumn that some vendors are making the decision now to sell, in the anticipation that the sales market going forward into 2019 might become more difficult. For purchasers, it means there is more stock coming into the market and positively slightly more choice, however, good stock is still being secured quickly, helped by continuing anticipated overall price growth.”
According to Ben Dreher of Mansbridge Balment, the current uncertainty in the market has caused a drop in sales volumes and an increase in available property. “For the first time in many years, buyers now have the upper hand and as such, there is more scope for negotiation - so yes, they should buy now if they can. Once Brexit is agreed and as a country, we begin to prosper, house prices will undoubtedly start to increase again, so buying now could prove to be a very wise move.”
Residential Sales Manager of Rickman Properties, Stuart Mills, says that when the market is sluggish, and prices are proving more flexible, this is the ideal time to trade up. “The gap between higher and lower priced properties narrows considerably, for instance, if selling at £500,000 and buying at £1,000,000 the difference is £500,000. However, if the market were to come down 10%, the figures look different you are now selling at £450,000 and buying at £900,000, the difference is now £450,000. It’s the same properties, but you are saving £50,000. Looking forward, when the market goes back up 10% your old property is worth £495,000 and your new property is worth £990,000, so you have gained £45,000, making a total saving and gain of £95,000.”
He adds that more than ever this is a great opportunity to trade up, for those who hesitate, and wait until the market is back and moving forward they will see the gap between the more expensive properties and their own grow, and perhaps become unaffordable.
“Another factor to bear in mind is that if you buy a property now, the value becomes unimportant, it only becomes a factor when you sell. Most properties these days are owned for 10-12 years and longer. A property should be a home and enjoyed as such, if you like it and can afford it, and it’s what you want, buy it.”
Avin Jay, Director at Mansell McTaggart, agrees that now is a great time to sell and trade up if you are playing the percentage game. “Whatever the outcome, the markets and economy will take time to adjust. Very much the same when interest rates rise,” he explains. “I think there are two types of buyers out there, the ones who want to make a profit and the ones who make that emotional purchase. The real problem in the market is overvaluing and Stamp Duty, the additional 3 per cent required when purchasing a second home has got to go.”
Fine & Country’s Adam Tahir, says that very few people truly understand Brexit and what will or won’t happen across all public and private sectors. “Having worked through two prior recessions, there has always been one clear outcome, property prices in the UK will always increase. This comes down to the lack of supply and the ever-increasing demand of homes available. Over the next few years, uncertainty is the key feature here, however, with interest rates lower than they have ever been before, pre-Brexit remains to be a good time to sell, buy or upgrade,” he says.
“Some buyers have lost the meaning of buying a property now. Too many people buy a property for one price because it will be worth a higher price in six months. Over the next five years, we need to go back to buying properties as homes and stop focusing on the appreciation value. Brexit will be another blip, another reason for prices to come down or ‘balance’ so to speak, but eventually prices will increase again and when they do another situation or scenario will arise and the entire cycle will start again.”
According to Steve Wayne of Benjamin Stevens in Edgware, the property market is largely influenced by interest rates and salaries.
“Brexit, No Brexit, Hard Brexit…in the whole scheme of things, it will be another footnote to history in a decade. We have survived the Oil Crisis, 20%+ Hyperinflation in the 1970’s, Mass Unemployment in the 1980s, Interest Rates of 15% in 1990s, the Global Financial Crash in 2009, whatever happens, happens. People still need houses and a roof over their head. If property values drop, it is only a paper drop in value because you lose when you sell. Long term, we aren’t building enough homes, and so, property is a long game no matter what happens – the property market will always come good,” he concludes.