What will Brexit mean for the housing market now that Article 50 has been triggered?
Article 50 has officially been triggered, paving the way for the UK to negotiate its EU exit over the next two years.
Many will remember doom mongering from the likes of former Chancellor and now soon-to-be Evening Standard editor George Osborne about house prices crashing, but with the reality of Brexit upon us there are yet more predictions of what lies ahead for housing.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said there were concerns about falling transactions.
He said: “The housing market has held up much better than everyone feared but the undercurrents of uncertainty are still there with the number of transactions falling steadily since the vote.
“Inevitably this is having an impact on the market with prices softening, particularly in London which has also been affected by the increases in Stamp Duty and unsustainably high prices for a long time.
“The Stamp Duty changes and other obligations on landlords should in theory give first-time buyers more of an opportunity, but lending restrictions haven’t really made it much easier for them.
“We expect prices to continue to be underpinned by shortage of stock but the low level of transactions is bad news, not just for the housing market but for the wider economy.”
Others were more positive.
James Evans, chief executive of Douglas & Gordon, said his offices saw the number of sales agreed increase by 11% in the week after the referendum, a trend that has continued to rise.
He said: “The number of people registering to buy has steadily increased for the past nine months, with last month seeing the highest like-for-like increase in registrations since last June. A clear sign of confidence returning.
“When we look back at the relatively low number of transactions in 2016, the likelihood is that many sellers simply weren’t confident in the true value of their home. But for buyers, this created the strongest buyers’ market since 2009, with more choice and less competition.
“As every new landmark is ticked off the Brexit timeline – and the triggering of Article 50 is a big one – the property market gets another little boost of stability, encouraging people to get on with their lives.
“Years of low transactions are almost always followed by years of increased activity. With confidence returning, sellers are already demanding higher prices. The smart money is buying now because once Brexit has been negotiated – ‘hard’ or ‘soft’ – the Government will cement London as the world financial and employment capital.
“Once that happens, buyers could be left to watch prices rise again and rue the opportunities they missed.”
Mark Lawrinson, regional sales director of Portico in London, says at least some of the uncertainty over the withdrawal process has gone.
He said: “Brexit will no doubt mean a turbulent two years for the London and UK market as we begin to hear what negotiations and proposed deals are being put forward for Article 50 and our exit of Europe and the single market.
“I think we will see a continued slowdown or lethargic London market when it comes to sales volumes, and as we reported toward the end of last year, transaction volumes across London are already more than half of what they were before the 2008 crash.
“London has a significant part to play in businesses who trade and operate across Europe and the world, and a buoyant property market relies on the UK’s economic health.
“If Article 50 negotiations go well this could cause further price growth as the economy grows and we see the nation’s confidence lifted, but equally, if a good deal isn’t reached then the international companies who operate here or look to relocate here might change their minds, reducing the number of residents who live in the capital and again further reducing the transaction levels, which could ultimately lead to price decreases.”
However, David Westgate, chief executive of the Andrews Property Group, insisted Brexit is irrelevant to the domestic housing market.
He said: “Quite simply, there is no direct reason why it should have any impact on either property prices or where people chose to live.
“While some will argue that change leads to uncertainty and that, in turn, uncertainty affects confidence in the market, we should hold on to what we know and that is simply that the key driver of the housing market is demand, and that is extremely high at the moment.
“There is little point in worrying about something which we cannot control, and for that reason we’re continuing to do what we do best – matching people with the right properties for them and providing them with the right advice and guidance to make informed property decisions.”