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Brokers divided on chances of post-Brexit UK property ‘bounce’

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  • 21/03/2019
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Brokers divided on chances of post-Brexit UK property ‘bounce’
The suggestion that the resolution of the Brexit process may give the property market a boost has received a mixed response from mortgage brokers.

Property pundit Russell Quirk, who founded online estate agent Emoov, suggested that despite the “Brexit shambles”, the property market is in “relatively good shape” with prices in most UK areas higher than they were before the referendum, while transactions remain broadly static.

He added that with employment so high, and the cost of borrowing still low, “the scene is surely set for a post Brexit bounce in demand – whenever that may end up being of course.”

This followed the suggestion from Sam Mitchell, chief executive officer of online estate agent HouseSimple, that a Brexit delay may lead to a spike in activity.

He said: “If anything, a lengthy Brexit delay and shortening odds on us leaving the EU at all, could see an immediate spike in activity as buyers and sellers, who have been holding off until the end of March before committing, decide they’ve had enough of waiting.”

However, brokers are split not just on the chances of a post-Brexit bounce but also on how Brexit has impacted the market already.

The bounce has started

Stuart Gregory, managing director of Lentune Mortgage Consultancy, said that his firm has already seen signs of a bounce, with more purchase deals being arranged and an increase in enquiries.

Though he added: “We have to see this with caution, as this could change rapidly should confidence be dented by a ‘No Deal’ exit, which despite protestations by many on social media, the country doesn’t seem ready for.”

What’s Brexit got to do with it?

Jane King, mortgage and equity release adviser at Ash-Ridge Private Finance, said she had seen a “serious flurry” of offers being accepted since Christmas, though she suggested the mixture of factors behind this rise were not connected to Brexit.

Instead, she argued that vendors have realised they were over-pricing their property and were adjusting accordingly, while buyers were faced with lower prices and therefore better affordability, coupled with the recent publicity enjoyed by the Help to Buy scheme.

She added: “Since the referendum only a couple of clients I have met have mentioned the B word, mainly in respect of interest rates and a concern that they will rise. Nobody has changed their mind about the desire to purchase a home of their own which is still a massive aspiration in the UK.”

Brexit has made no difference

Andy Wilson, director at Andy Wilson Financial Services, said that in his part of Lincolnshire he’d not seen “any discernible reticence” from buyers due to Brexit, noting that few clients saw Brexit as a significant threat to their livelihoods, financial well being or prospects.

He added: “Time will tell whether this is being naïve, but for the time being most are happy to buy – and before further price rises. We ask every client ‘what is your view on house prices going forward? and most suggest there will be gentle increases – but very few fear a downturn.”

Well-priced properties are the key

James McGregor, director at Mesa Financial Consultants, said that he didn’t believe there would be a post-Brexit bounce, arguing that unless real wage growth catches up on property growth from the last five years, it will be hard to stimulate the market for a while.

He added: “What we are seeing is properties priced correctly are selling very fast. We work with a Surrey estate agent two days a week and if their vendors listen to their advice, the properties sell. Properties are only left on the market if the vendors have unrealistic expectations of what their properties are worth.”

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