Whether you voted Remain, Leave or didn’t vote at all, it’s hard to get your head around the magnitude of events. To say we’re living history is an understatement.
Events were all the more surreal because the lack of exit polls meant we really had no idea what the result might be until it was suddenly there, right upon us, staring us in the face.
In no uncertain terms, people in the UK have made it crystal clear how they feel and the UK’s economy — and property market — now have to respond.
In the days and weeks ahead, there will be a huge amount of hypothesising about the fate of the UK property market, but the reality is it’s impossible to know the full ramifications of the Leave vote.
How the Bank of England, the Government, the financial markets and economy react will be crucial to how the property market performs. Thankfully, Mark Carney has already underlined that the Bank of England is ready to do whatever it takes to support the UK economy. That was reassuring to say the least.
It’s very likely that consumer caution, reduced transaction levels and downward pressure on prices will come into play in the near term. But at the same time it’s important that we don’t write off the property market.
Despite the vote for Leave, the structural supply issue at the heart of the UK’s property market may well prevent prices falling materially. And after the Global Financial Crisis, let’s not forget that many are used to living in challenging or uncertain environments. That will surely serve us well.
Overseas demand may also increase on the back of the decimated Pound. For many overseas investors, buying British property just got a lot cheaper.
Short-term liquidity issues are possible, if not likely, among bank lenders and non-bank lenders that have bank funding lines. At the same time, the appetite for risk as a whole will almost certainly reduce until we have a better understanding of what we’re facing — and how, if necessary, to overcome it.