In the aftermath of last Friday’s seismic events – the Leave vote and David Cameron’s resignation – the property world is attempting to settle down to the new ‘normal’, whatever that may be.
The task has not been helped by decidedly mixed media commentary over the last few days.
Mortgage costs are going up – or down (as early as this week, according to Ray Boulger of John Charcol).
Buyers are pulling out of deals – or going ahead.
Deals collapsed on Friday morning. Deals went ahead. Prices were being re-negotiated downwards. But also upwards (Hamptons International reported that two European buyers raised their offers on homes in central London because currency movements would compensate for the increase).
The London property market is dead in the water. On the other hand, foreign buyers are snapping up London property because the fall in the pound has made it so much cheaper.
House prices will fall (by 5% outside London says KPMG, 10% by Christmas says Henry Pryor and 18% if you ever believed George Osborne). House prices will not fall because the market remains under-pinned by a lack of supply.
There will be a recession (Royal Asset Management). Or not (asset manager Old Mutual UK Alpha which believes that the Leave vote is nowhere near being a second Lehman moment).
So, is the property market “facing a Darwinian future of victims, survivors and predators” (Jonathan Hopper of Garrington Property Finders)? Or has the threat been well and truly over-blown?
Realistically, it remains far too early to say what will happen in the residential property industry.
A number of posts on our running Brexit story on Friday were both stoic and positive in equal measures – despite much negative commentary elsewhere.
Paul Smith, CEO of Spicerhaart, has since welcomed the Leave result and called for confidence within the industry.
He said: “We’ve grasped a huge opportunity for the UK and we have every reason to be confident about the long-term success of the property market.
“The underlying strength of property is sound, and it will remain a great investment because more people than ever are looking to get on to the ladder and there simply aren’t enough homes available.
“In the short term, things could be turbulent as people come to terms with a result that wasn’t expected. But we now have some certainty.
“It’s up to the Government to lay out a clear timetable for renegotiation of our relationship with the EU so that we can get on with doing what British people are very good at – buying and selling houses. Smart buyers stand to gain from the uncertainty of others in the weeks ahead, and confident sellers may find that they are in a good position as others wobble.
“House prices may go up and down as they always have, but demand pressures will sustain prices over the long term. We’re on course to see the greatest investment since the war, and residential property continue to pay off for home owners.
“Britain should be confident. We are an economic powerhouse and we will continue to be a magnet for international investment.”
Dexters chief executive Jeff Doble, with over 60 offices across London, said that “several dozen” sales were agreed on Friday, and that his message is to keep calm and carry on.
He said: “Following months of will we/won’t we, the Referendum is now out of the way and there is no longer a compelling reason to wait and see.
“After some short-lived hesitation from buyers and investors we expect prices to remain steady and then rise gradually in 2017.
“We have spoken to literally hundreds of investors, property developers and buyers and they are overwhelmingly pressing on with their plans.
“Buyers and, in particular, international investors, continue to see London as a safe long-term investment, with reliable returns from a vibrant letting market.
“London will no doubt reflect – then realise that property prices aren’t going to change much and nor are the prospects for London property over the coming years.
“At Dexters it is business as usual. Life and the market will carry on.”
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