In, out what’s it all about if you’re trading in property? Is the political uncertainty over Brexit a reason for investors to change their behaviour?
Choice reports that when the Bank of England Governor, Mark Carney, warned last September that a disorderly Brexit could send house prices crashing by a third, many people dismissed his comments as the latest instalment of Project Fear.
Forecasts of economic doom caused by Britain exiting the European Union are viewed very differently depending on which side of the argument you fall.
Even those who balk at predictions of financial Armageddon will have taken note of some figures published this week suggesting that the political uncertainty surrounding Brexit has helped to push transactions in central London to their lowest in a decade.
While property markets elsewhere in the UK have remained steady and, in the case of much of Scotland, appear to be booming, the current political deadlock has posed some important questions for investors. While politicians continue to squabble, businesses do their best to make contingency plans and households stockpile tea bags and aspirin, some people are trying to buy and sell homes.
Most of us might think that now is the worst possible time to make such huge, financial commitments but Rightmove, the property portal, reports that viewings are up on this time last year. We may be experiencing greater uncertainty than any of us can remember but it appears that boredom with Brexit is prompting many of us to press on with our lives, regardless.
There are still several underlying issues of concern in the property market, namely that prices are high relative to earnings and that interest rates are rising, compounded by exacting mortgage-market conditions. While the costlier markets, in London and the southeast, continue to underperform we don’t appear to be facing a crash. Not yet, anyway.
A disorderly Brexit may change all that and the gloomier forecasters predict prices might fall by 10% – or even higher if we leave the EU without a deal.
Homeowners looking to move might, perhaps think about delaying their decision until the current impasse has been resolved, but for people who make their living from buying and selling properties, holding-off may not be an option. If you’re one of those, here are responses to some frequently asked questions about property prices and Brexit.
Should I buy now?
At a time of relatively weak house-price inflation, you’re unlikely to be disadvantaged by waiting until there’s greater clarity in the market, but the situation is not so perilous that you should hold-off for fear of a collapse. Buying to rent is less of a risk than purchasing for a quick turnaround. You may not achieve the premium you expect in the next few weeks or months if Britain crashes out or if a decision continues to be delayed.
Should I sell now?
The supply of homes for sale is at an historic low in many parts of the country so, if you have a property to sell, you could use this to your advantage. In parts of Gloucestershire, Buckinghamshire, Dorset and the East Midlands, for example, there’s a massive shortage of family homes. If you own a desirable property in a sought-after area, you could be sitting on a gold mine.
Is it taking longer to find a buyer because of Brexit?
Rightmove reported recently that properties in the north-east of England take the longest to sell – 85 days on average from listing to going under offer – while Scotland has the fastest selling times in the UK, at 53 days.
Remember these are only averages and, in some hotspots, sales are taking less than a fortnight. There’s no doubt that, with the March 29 deadline for Brexit looming, many people will be waiting until afterwards to decide to buy or sell.
Can I test the market before March 29?
Having a property listed for sale over several months can be a turnoff to potential buyers and dropping the price can be even more off-putting. One way to avoid creating a digital footprint is to ask an estate agent to advertise your property “off market”, by advertising it only to buyers on their database.
What can I do if my property doesn’t sell?
Look at the asking price and consider how the property is being marketed. If it’s unfurnished, think about adding some decoration or furniture. Sometimes small adjustments to your schedule can make a big difference, such as changing the order of images or getting some better photographs taken.
(Story source: Choice)