UK property market remains largely unchanged since Brexit
According to analysis from estate agents, Jackson-Stops & Staff, the supply and demand in the UK property market has, so far, not been affected by Britain’s vote to leave the EU…
The full consequences of the referendum result may not be known until later this year.
When the result of Britain’s vote to leave the EU became known, for many, their first thoughts were what impact it would have on the property market. On the day the decision was announced, Jackson-Stops & Staff, carried out an analysis of over 750,000 properties for sale across the UK, approximately 90% of the UK total.
The results revealed that 41.5% of properties were under offer. Analysing the same percentage of properties on July 6 showed that 39.9% were under offer, a relatively small drop compared to what some analysts had predicted. It indicated that the balance between supply and demand as well as other driving forces within the UK property market had not been affected by the referendum result.
However, the chairman of Jackson-Stops & Staff, Nick Leeming, said this relatively calm situation may not last for long, explaining: “In the short term, buyers as well as sellers are still driven by the normal catalysts for entering the property market. The real impact of the decision to leave the EU may not be known until the autumn, once the usually quieter summer months have passed and the new Prime Minister, Theresa May, has settled in.”
Stamp duty costs more worrying
The director of Jackson-Stops & Staff, Jim Dansie, feels that, in the short-term at least, stamp duty is just as much a problem for the property market as Brexit, saying: “While initial lower consumer confidence because of Brexit will have a slow-down effect for the rest of the summer, the life decisions that lie behind people buying and selling property will always be there.
“At the same time, properties worth around £1m plus have been severely penalised by the new Stamp Duty Land Tax. Our company often needs to discount properties over £2m to take into account these higher stamp duty costs.”
London affected more than elsewhere
One area of the housing market that has felt an initial negative impact from Brexit is the London residential market. There have been reports of buyers pulling out of deals amid house price and job security fears. Nevertheless, the director of residential development at Jackson-Stops & Staff, Ben Babington remains optimistic, saying: “The EU referendum has clearly had an effect on the residential property market and as the UK tries to forge a path outside the EU it’s evident there will be further significant change for the whole country in the future.
“However, the important events that mean people buy a property will always remain. The capital remained a shining light for worldwide investment despite the economic crash in 2008 and we believe this will also be the case with these present turbulent times.”