Jul 06, 2016 PROPERTY SALES SHARE

Brexit - is it all doom and gloom?


POSTED IN PROPERTY SALES

Here are a few quotes that are currently around from various sources reflecting the more positive side of the EU exit:

“As soon as Brexit was confirmed last week, the cost to banks of funding fixed deals started to fall,” says Paul Thomas in the Daily Mail. “This is measured by so-called swap rates. In the wake of last Thursday’s referendum, swap rates fell by as much as one-third. These falls should soon be passed on to borrowers in the form of lower interest rates.”

It’s also important to remember that people always need somewhere to live. “In the long-term, being in or out of Europe simply does not reverse the fundamental driver of the mainstream housing market, namely that there are too many people chasing too few homes,” says Dan Gandesha, founder and CEO of Property Partner, i=on Huffington Post.

“There are no signs of the British property market ‘falling off the face of the earth’ as some had feared it might if the UK voted to leave,” reports Hazel Sheffield in The Independent.

Jeremy Leaf, a former chairman of the Royal Institution of Chartered Surveyors and north London estate agent, said the “Brexit bombshell” came when prices were already slowing, especially in London, following the increase in stamp duty at the beginning of April. This perception of an existing slowdown meant the market was “more resilient than we might have expected”, he said. There was “a determination on the part of most customers to get back as close to normality as possible”.

Britain's housing market has steadied after some deal cancellations immediately after the country voted to leave the European Union, housebuilder Persimmon (PSN.L) said on Tuesday. Chief Executive Jeff Fairburn said it was too early to judge the impact of the June 23 "Brexit" decision, but his company's focus on lower priced deals involving first time buyers and first-time movers made it well placed to cope with any turmoil. "There is some uncertainty among people about what's happened and that's natural, but we've not seen that translate to any significant change in our trading," he told Reuters.

Quotes from The Guardian and Evening Standard say, the consensus is that there is a good chance that prices will soften but that the ground is unlikely to fall from beneath the market, so should you go ahead with your purchase? Experts seem to suggest this depends on the nature of the deal. If you're an investment buyer looking to buy a second home to rent, for example, it might be worth holding fire. Similarly, if you have a small deposit of five per cent, it might also be worth letting the dust settle a little. However if you have a decent amount saved up and are looking to buy a home to live in for a number of years, it's probably worth going ahead, says Virginia Wallis in the Guardian. She adds if you are "buying a long-term home to live in", short-term price movements should prove "fairly irrelevant". Ray Boulger, a mortgage adviser and property market commentator, says much the same in the London Evening Standard. 'I'd advise people who have been looking for a property for a long time and finally found one they want to just go for it," he says.

Our thoughts mirror the general thoughts of the country, that it is way too early to predict how the market will react. As a nation we need to keep an eye on the situation over the next 24 months and act accordingly. But as you can see, maybe it's not all doom and gloom.

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