If you have watched any news whatsoever in the past few weeks, you are likely already aware of all the latest Brexit developments. But as the vote has now been delayed by another 6 months, you may be wondering what effect Brexit is going to have upon the property market in this intervening period. Although the date currently seems set for 31 October, the perceived established trend of uncertainty and delays seems set to continue. Resulting in a stagnant market with no definitive conclusion or resolution in sight, but is it really doom and gloom? Or in the face of uncertainty, is now actually an opportunity similar to what we saw in 2012 for those who sold and purchased during that uncertain period.
With this in mind however, let’s take a look at some of the existing effects that Brexit has already had upon the market, as well as the predictions some experts have for the future.
According to RICS (Royal Institution of Chartered Surveyors), throughout March, the UK continued to see a decrease in demand from buyers as well as new property coming into the market. A trend that they claim has been evident in the wider climate for a number of months now. They have directly attributed this pattern to buyers apprehension surrounding property investment, especially given the uncertainty currently present in the trade as a result of Brexit. In truth, we haven’t seen this. We can only comment on the properties we have marketed but given we have sold 7 properties within 10 days over the last few months with multiple buyers being interested on several of them, we seem to be bucking the national trend according to RICs. Long may this continue.
With Simon Rubinsohn, RICS Chief Economist, claiming that: “Brexit remains a major drag on activity in the market with anecdotal evidence pointing to potential buyers being reluctant to commit in the face of the heightened sense of uncertainty”. Although new properties coming to market is down on 2018 numbers locally, savvy buyers who are benefiting from low mortgage rates and property prices remaining fairly consistent, are still out there in good numbers.
It has been argued by some however, that this change simply reflects a natural adjustment in the market, following the past several years of growth.
All that being said, the East of England continues to buck the trend with 0.8% increase in house prices according to Rightmove in the month of May. The price of newly-marketed property increases by an average of 0.9% nationally (+£2,841) this month, buoyed as usual by the higher buyer demand associated with the more active spring market. What is surprising against the backdrop of Brexit uncertainty is that four out of eleven regions are showing few signs of any Brexit blues and have set new record highs for average asking prices. Miles Shipside, Rightmove director and housing market analyst comments: “Price increases are the norm at this time of year, with only one fall in the last ten years, as new to-the-market sellers’ price aspirations are under-pinned by the higher buyer demand that is a feature of the spring market. Indeed the 0.9% monthly rise is consistent with the previous two years’ average rise of 1.0% over the same period. What will seem inconsistent to some, given the ongoing uncertainty of the Brexit outcome, is that four out of eleven regions have hit record highs for new seller asking prices.”
Compared to the rest of the UK, property owners in the regions which have reached new record prices seem to be overcoming hesitancy to come to market. Their average number of new sellers so far in 2019 is holding steady compared with last year, at just 0.3% down. In contrast the remaining seven regions are seeing new listing numbers for the year to date down by an average of 6.5% compared with the same period in 2018. Shipside observes: ”Activity breeds activity and a greater choice of fresh properties in these record-setting regions helps to spur buyers into action, especially if they have a property to sell. This in turn adds another new listing that might then tempt another buyer, in a virtuous circle. And in much of the rest of the country, despite the ongoing political uncertainty, agents are reporting that the lure of the right property at the right price still attracts good interest. In spite of some of the challenges in the market, interest in property remains very high. People’s ongoing desire to satisfy their pent-up housing needs means that on average someone contacts an agent on Rightmove every second.”
Many have suggested that the current climate is actually creating a brief opportunity in which to invest in property. More specifically, the Founder and Director of Property Experts, Bruce Burkitt, affirms that “Brexit is simply a condition in the market and an economic challenge that we are experiencing at the current time, but it’s actually a great opportunity for people to buy.” We can certainly support this view from a local perspective, both from Investors looking for ideal properties with good yield potential and First Time buyers who are keen to benefit from the low mortgage rates and stagnant house price growth we have seen over the last 12 months
He goes on to claim that “Contrary to common thought, a volatile, falling market creates a great opportunity to buy, if investors and buyers adopt and follow specific guidelines.”
Properties under £300,000 locally seem to generate excellent viewing numbers from the properties we have taken on locally and sold over the last 6 weeks. Interestingly, there is real demand and interest in properties from non locals who are looking to move into the area, which again is fantastic news for anyone selling who is looking to maximise the real value in their homes. Pricing right continues to be the key driver for any sellers who are looking to move, pricing right at point of launch will be the difference between selling and sticking – the real positive being that if you do, there are buyers out there ready to act.
Interestingly, locally there have been 830 sales agreed year to date across Huntingdonshire, given we are half way through the year, we are still on course to perform fairly consistently to 2018 on current numbers with just over 1700 sales being agreed in 2018. So despite the noise of Brexit and perceived uncertainty from other quarters, from a local perspective, home buyers and our local market seem to be pretty resilient and looking at the long term view rather than the short term here and now.
Final Word
We had a fantastic month in May. Sales and really strong activity continue. Duncan Way in Hartford sold in 10 days achieving over the asking price as did Priory Road in Huntingdon which we inherited from another agent and sold within 3 days. Just 3 months into our journey, I'm still blown away by the support and positive comments we are receiving in the way we are marketing our properties and the results we are delivering for our clients, so thank you to you all for the continued support, it generally means the world to me and all the team. Due to the speed of sales we are generating, we do have availability and head room to work with more sellers so if you are thinking of selling or know of anyone, id really appreciate it you could make contact with me.
If you are new to us, feel free to follow us on Facebook where you can keep up to date with what we are up to www.facebook.com/LennonJamesProperty/ or our website which is www.lennonjamesproperty.co.uk
If you want to talk to us our team at Lennon James are on hand to help and assist in any way that we can.
Jon Brierley – Founder of Lennon James Property
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