The governments ‘Remain’ propaganda machine was working at ‘full pelt’ ‘spewing out’ vitriolic rhetoric like an over worked ‘pebble dasher’. Every day there were more threats and scare stories.
What happened at this time to the Residential Property Market? Basically, it stood still, that’s what it did and very few transactions took place during this time which will be bad news for the economy.
You could say that this was the ‘darkest hour before dawn’ but now that we are in the new era of independence, and despite the political turmoil in both the Tory and Labour camps, the gyrations of the currency and stock markets, believe it or not, it is good news for the Residential Property Market.
Let me explain why.
The substantial depreciation in Sterling against the Dollar and the Euro has presented a big gain and a huge opportunity for International buyers coming to this country. Thanks to the, ill-considered, Chancellor’s draconian Stamp Duty increases, property values in the middle to upper range are now 30% below the peak in 2014 and, therefore, taken together with a currency gain, a buyer could be paying up to 50% less for a property in the UK which is a huge inducement not shared by any other metropolis in the world. By way of illustration, a property in America or Europe for a Sterling denominated buyer, is 20% more expensive.
UK buyers will enjoy the same discounted prices but have the added assurance that Interest Rates/Mortgage Rates will remain steady, or possibly lower, for the foreseeable future and this has been endorsed by the Governor of the Bank of England, Mr. Carney.
Since the supply of homes has been increasing over the past 18 months, with shrinking demand, there has never been a better selection of properties available and as a buyer in a buyer’s market they should be well disposed to take advantage of these circumstances.
With alternative investments, in the capital markets, gilts, cash, being so precarious and risky, there is still only one bastion of safety left to invest in, that remains tax free (if it is your primary home) and that is residential property.
Stability will soon return to all the markets when this ‘Leave/Remain’ furore has ‘died down’ and I see the best time to buy property to be between now and September. July and August are notoriously quiet due to the summer months and this seasonal malaise has to be in the interests of a buyer.
When there is a new Tory Prime Minister in place, from early September, and people return from their summer holidays, I think that market activity will increase noticeably since a great deal of positive decision making has been suspended, or delayed, by the Referendum campaign, that will pour through into the market in the Autumn months.
This is said from someone who is not known for empty, overly, optimistic forecasts (!) and is a classic example of ‘every cloud has a silver lining’.