“So, what to do if one wants to sell prior to Brexit? We are beginning to see a stand-off between buyers and sellers again:
It is a buyers’ market but the UK does not seem attractive to our European neighbours – and why should it? We have in effect stuck two fingers up at them – so why would we expect them to now buy our properties? The Americans are back buying, but not in great enough numbers to make a large impact; the Far East buyers are finding better value elsewhere and the Russians are persona non-grata. Reduced oil prices until recently have meant that GCC buyers have also taken a step back.
Nevertheless, there remains a domestic market and they are important. They are also however bombarded by Brexit headlines, making them nervous as to what might happen, and with no clear guidance from the Government, they are naturally cautious as they consider the various scenarios:-
We get no deal. If this is the case, the Government would be foolish not to introduce tax incentives to bolster the economy and encourage inward investment. Higher value properties should do well in this environment. However, properties in areas which traditionally attract buyers who need mortgages will see price declines as interest rates are increased to offset price inflation from the increased cost of imported goods, a result of the inevitable decline in sterling.
If we get a less formal decision which effectively kicks the can down the road, we will continue to see the indecision in the market.
If we get an EEA type deal or a second referendum which produces a ‘remain’ vote, we see the property market improving dramatically – because (and not wanting to get into the pros and cons of Brexit) these scenarios provide a level of certainty around which people can plan their lives.
So with no clear roadmap in sight, the market slows down. Our view is that people do need to move to suit their changing lifestyle – more children, children leaving home etc…, but the barrier to this has been SDLT, not necessarily Brexit. To sell today, vendors will need to consider transacting at a price which is between 10-15% below where current asking prices are, to allay buyers fears. But there are buyers out there. Most vendors do not need to sell, which reduces supply to the market (and oddly has the effect of propping up prices in this bizarre environment). However, If you really have to sell, you would be well advised to listen to your agent – they know where the buyers are.
In conclusion, a point to consider is that most homes are owned for 7 or 10 years or longer – over this period a great deal can happen. We have to deal with Brexit and our lives must go on”.