Gascoigne Halman on the post-Brexit Property Market
John Halman, managing director of estate agent Gascoigne Halman, gives his thoughts on the post-Brexit property market
Mortgage Advice in Manchester by Manchestermoneyman.com
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It’s a long time since the future of the property market was so uncertain as we all consider the changes that will take place in our lives as a consequence of the BREXIT vote and the likely effect on the property market, both in the short and longer term.
The short term effect is, of course, the easiest to gauge. None of us likes uncertainty and it is only natural for caution to impact on our decision making whilst we get our heads around what it all means and events, such as the search for a new Prime Minister, play out.
In the longer term, however, the effects are less clear but certain factors need to be considered before arriving at too pessimistic a conclusion.
We have been building too few houses for many years and with people living longer there remains a chronic housing shortage within the UK. Traditionally bricks and mortar have been the safest haven of people’s investment. And, whilst there have been short term blips, the trend in housing values has continued in an ever upward spiral.
Already we have seen Mark Carney, the Governor of the Bank of England proposing that it may be necessary to reduce – not increase as previously suggested – interest rates. This is to ensure that the wheels of industry continue to turn, but at the same time making housing costs cheaper and providing greater liquidity for movement within the property market.
In the event the market takes a short term pause, it usually follows that the rental market expands to take up the slack for those choosing to delay a property purchase and this in turn brings higher rent levels with attractive yields.
We believe that this will stimulate additional activity from Buy to Let investors despite the taxation changes to tax relief on borrowing and the higher stamp duty introduced by George Osborne. The effects of these improved yields underpin the values of property and we are already seeing an increase in Buy to Let enquiries.
I have worked through a number of recessions, albeit without a change quite as radical as that which we are currently embarking upon, and always the market recovers as property ownership features as our safest and most sought after asset.
Whilst there is a strong residential market in Manchester there will always be a supply of residential homes subject to the constraints of the above. Supply and demand has continued to push prices higher and this is only checked by a loss of confidence such as that experienced with the crash of 2008 and anticipated by some following the decision to exit the EU
Prepare for some choppy waters, but I expect little variance to achieved property prices albeit there may be a decline in transactions. Once confidence resumes, as it surely will, when all uncertainty is removed, inevitably there will be a release of pent up demand and expect an uplift in values. The early bird catches the worm.
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