‘Business as usual’ adds up to post-referendum reprieve
Since the UK voted ‘Leave’ on June 23, the media has been quick to climb on the ‘UK
Since the UK voted ‘Leave’ on June 23, the media has been quick to climb on the ‘UK housing market in major crash!’ bandwagon. But a month on, and with the dust firmly settled — plus the stabilising influence of a new prime minister in place — it’s a good time to analyse what’s really been happening, reckons LUCY BOON
THERE has been a barrage of negativity on the property market since the UK voted to leave the EU a month ago. But beneath all the noise are some facts and figures you just can’t argue with.
Yes, there have been changes afoot in London, but that’s certainly not the whole picture.
International buyers are snapping up property ‘bargains’ in some of London’s wealthiest areas. We’ve also seen the pound stabilising and the Bank of England saying yet again that there will be no change in the base interest rate — fuelling some of the best mortgage deals to ever appear.
Who could have predicted all this a year ago?
And despite many agents countrywide reporting buyers pulling out of property purchases the day after the referendum, most agents in Henley and its surrounding villages experienced just the opposite.
The new homes division of local agency Romans had one of its most successful weekends of the year immediately following the EU referendum results, with more than £6million worth of property being sold. It also recorded an eight per cent increase in users visiting the Romans website the week after the Brexit vote.
At Ballards on Thames Side, negotiator Oliver Symons said: “I think all local agents were worried they’d get a load of phone calls on the Friday [June 24] from shaken buyers pulling out of deals. However, it just didn’t happen. Now, when speaking to sellers and buyers about their thoughts on the market, there is a strong ‘business as usual’ response which is certainly encouraging as we head in to the latter half of 2016.”
Romans Henley manager Richard Wagstaff added: “The local marketplace is still very robust and people are continuing to buy, sell, let and rent property. Out of the 900 current property sales agreed with Romans, only 20 were cancelled during the week post-Brexit. This is only marginally more than can be expected during a normal period.”
Simmons & Sons said it too had experienced little repercussion from Brexit on a domestic level. “We had offers and agreed sales in the few days after the referendum, as well as being instructed to sell property and invited out to value others,” said Trevor Michel.
Karen Drakeford-Lewis, sales negotiator at Peers & Hilton in Duke Street, said: “We have had no one pulling out of deals because of the Leave vote. The day after the referendum, we even had an exchange, which has now completed.”
Moving forwards, Karen said she finds a lack of housing supply to be a more worrying prospect than anything else.
Vincent Courtney, managing director of residential sales at Romans, also touched on this, saying: “House prices will only fall if the balance of supply and demand changes.”
Karen at Peers & Hilton continued: “People still have to live in houses — it’s not like the housing market is going to disappear. We’re out there still selling houses and still taking houses on. We have got investment buyers, first-time buyers and families in Henley.”
Peter Kavanagh, group managing director at Romans, agrees. He said: “The reasons you need to move now or in the future are very unlikely to have changed. Babies are still being born, couples are still getting married and divorced, people still need to upsize, downsize and relocate due to jobs or to get into specific school catchment areas.”
Also thinking along practical lines, Knight Frank’s chief economist James Roberts said it’s worth remembering that property is really a long game. He said:
“Ultimately, the UK is a country with 60 million wealthy consumers and a high-skill workforce. Consumer goods firms like Coca-Cola and BMW will always want to access a market this big, and skills-based employers such as PwC and Google will always want to access such a large pool of talented workers.
“The underlying strengths of the UK economy remain in place, and ultimately real estate is an investment that works best for those who pursue long-term goals.”
Those locals still concerned about a housing price crash should perhaps consider another important point — the fact that they’re living in Henley or surrounding villages. Most agents will tell you that our area tends to sit in a property ‘bubble’ — no matter what is going on on a national or indeed international level.
Factors such as vicinity to London/Heathrow/Reading, transport links and good schools, all create a kind of buffer, tending to mean our town is protected — to a certain extent — from wider trends.
Trevor at Simmons & Sons explained: “The market in Henley is certainly less volatile than others. It’s one of the hotspots in the UK where property is pretty much ring-fenced by there being an awful lot of money in the area.
“Also, we are a very popular place to live but there is not a lot of property available to buy at any one time — demand outstrips availability. So although I’d say that we have yet to see a clear line as to what the future holds regarding property, historically Henley is a very stable market and better insulated against change than most.”
Oliver at Ballards agrees, saying: “Henley and its surrounding villages have proven so far to be resilient to any perceived knock in confidence and we continue to see strong activity with several exchanges and sales being agreed over the last week through varying price brackets.”
That’s not to say there won’t, naturally, be a certain proportion of potential buyers who decide to stay put for now, amid house price and job security fears, worries over negative equity, and price readjustments.
Although Henleyites are in a good position, like anyone we’ll still feel a certain degree of fallout from the wider referendum picture.
With this in mind, it could be worth noting that when it comes to national figures, property portal Zoopla has predicted the average UK property value to fall by £53,000 from its current level of £297,000 over the next few months.
Standard Property, too, has noticed a slight increase in email alerts of reduced prices in the wider local area — although this could have something to do with a levelling out of prices (a “price readjustment”, the agents call it) following on from 2014’s stamp duty overhaul.
Meanwhile, over in Reading, Sara Batting at her town centre agency of the same name, said that she had indeed noticed a knock-on effect from the leave vote.
“This being Reading, we get a lot of London leavers relocating. The day after the vote I had one client telling me he’d had to reduce the price on his Canary Wharf apartment and that it would affect his plans.”
Sara added: “I do think the newspapers didn’t help, fuelling a fire of doom. Yes, unless people really have to move, some are staying put for now. However, in the longer term I’m expecting things to level out. Ultimately, we’re British people and British people want to live in their own home. We will do almost anything to achieve that.”
As Standard Property recently heard one housebuyer say to their agent: “I did have a wobble the day after the referendum, but then I thought, ‘What am I doing? This is the perfect house for me!’ So I bought it.”
And looking at the larger picture, Trevor at Simmons & Sons said he’s expecting to see a calmer approach to things over the next 12 months, as people adjust to a post-leave world.
He said: “Looking forward, we believe the market will stabilise at recent levels. We need more activity, more property on the market for the many buyers out there — and as confidence returns so will these extra properties. Let us hope the weather stays bright, too!”