This morning the results of the EU referendum are in and the majority of the British public have decided that Britain is better off out of the European Union.
The news has brought instability within a number of markets and the British pound has slumped to its lowest level since 1985.
But what does it mean for UK homeowners?
eMoov CEO and former Brentwood First councillor comments on today’s result.
Many will be running to their nuclear bunkers now that the apparent end of the world is nigh. But before they do, they might want to take a breath and sit tight. We’ve voted to leave the EU and regardless of personal views we must respect the democratic position of the populous.
We don’t anticipate any tangible difference where the UK property market is concerned and the supply and demand balance that is currently dangerously out of kilter will see little sign of stabilising itself.
Whether we are in or out of the EU, people still need to move house and for many, many reasons.
Supply of new build housing is currently running at around 180,000 units per annum. The UK needs 250,000. Therefore, demand for property will not waver and this continued imbalance between supply and demand will naturally keep prices buoyant.
There will be some very short-term uncertainty that will result (as it has) in sterling and share prices dropping. This should only be a knee-jerk reaction and these markets will recover.
Going forward the UK market will go from strength to strength, perhaps with wobbly knees at it emerges from the clutches of the EU, but it will soon find its feet again.
Inflation is very low (0.3%) and should ensure that interest rates do not rise and it is widely confirmed that borrowing costs will not increase.
There may be many buy-to-let landlords and second homeowners rushing to list their property for sale in order to maximise their profit, before the “Armageddon” on the horizon destabilises the pound. Ironically it will be these people flooding the market with additional stock that may see prices cool ever so slightly.
However, property values increased by 6% over the course of 2015 and we predict the same rate of growth by the end of 2016.
Homeownership will remain far out of reach for the average UK citizen and the overwhelming swell of demand for property will remain despite our choice to leave the EU.
This could, however, be the final nail in the coffin for the Prime Central London market, as the capital’s high-end properties have never been less desirable in the eyes of foreign investors. With demand having slumped to record lows over the last year, it’s not looking good for the capital’s property elite.Russell Quirk