Following the initial shock of Brexit, many expected the property market to take a huge hit following the drop in the pound. Indeed, immediately after the referendum on 23rdJune, there was a definite feeling of uncertainty within the property market, and this was reflected in some buyers hesitating to complete deals or withdrawing from purchases altogether.
Nevertheless, three months on from Brexit, Britain’s property market is (perhaps not unexpectedly to industry insiders) still booming. Confidence in the housing market has returned and there are undeniable signs that property prices and sales will rise again in the coming months (particularly in popular areas such as South Manchester).
Although buyer enquiries were reported to dip slightly in August, this is also attributed to the increase in SDLT on purchasing second homes, which was introduced on 1 April, and consequently many potential buy-to-let property transactions suffered. Additionally, it is well documented that the August holidays often cause the market to slow, with a general pick-up expected in September and October. This year has proven no different, and October is showing clear signs of the market growing. According to the latest monthly report from the Royal Institution of Chartered Surveyors (RICS), across the UK, 12% of surveyors reported house prices rising rather than falling in August, up from 5% in July – signalling Britain’s property market is strong.
A survey was conducted in September, analysing the outcome of Brexit on SME housebuilders, who play a crucial part in attempting to reach the Government’s target of 1 million new homes by 2020. The survey showed that over two-thirds of them said it had had zero impact thus far, with only 22% reporting delays, and 10% reporting that projects have been cancelled as a direct result. It was also shown that 3% of the participants actually had projects brought forward or boosted following Brexit. It was therefore suggested by chief executive of the Federation of Master Builders, Brian Berry, that: “the market appears to suggest that it is very much ‘business as usual.” This is contributing to the overall feelings that the referendum result has had very little effect on the property market.
Over the next five years, it is forecast that property prices will increase a further 3.3% a year on average, with the North West expected to be a front runner as prices continue to soar. Conversely, in London, there is steady decline in property prices, as the South seems to be taking the hit of any leftover uncertainties following Brexit, perhaps adding to the success of the North.
In Manchester, in particular, the commercial property market does not seem to have been greatly affected by Brexit and any reservations individuals or SME’s had about buying or investing in new commercial properties seem to have been put to one side. Many reports suggest that even throughout the summer months following Brexit, the commercial market in the North West has remained unchanging and property prices have continued to be steady.
As interest rates have been lowered, both the residential and commercial property market in the UK is seen to be stable and there appears to be no slowdown of sales and purchases. Investors seem keen to continue financing new constructions and there is no suggestion that property prices might now decline following the referendum. It remains to be seen if market confidence remains after Article 50 is triggered.
Our Property department deals with a range of matters, including residential sales and purchases, re-mortgages, commercial leases and commercial sale and acquisitions. If you require assistance with any Property-related matter, please do not hesitate to contact our team of specialist solicitors on 0161 832 3304.