We are now nearly 3 weeks since the shock result in the EU Referendum. Will the result starting to sink in people are unsure about the stability of our economy. We have seen the GBP suffer to its worst value in 35 years and the FTSE 100 drop to record levels. But with any downturn there is always a recovery and/or response. In the last 3 weeks the FTSE 100 has recovered to reach records highs for the past 11 months! Is the whole BREXIT excuse just an interim kneejerk reaction? One thing for sure is that in a time of uncertainty the first place people look for answers is the property market.
Journalists’ and economists’ are predicting a tough time ahead in the UK’s property market. The sales market has seen a drop in prices up to 6% since the referendum and applicants are very thin on the ground with agencies struggling to sell and/or let their stock. This is the second issue to hit the property market since the new stamp duty for second owners introduced in April this year. Back in February and March we saw a rush of buy to let landlords looking to purchase properties, trying to beat the deadline for this elevated taxation. The result of that was an increased quantity of properties to the market resulting in many agents struggling to move what may have historically been ‘easy to let’ stock. The supply very much outweighs the demand and subsequently reductions have been seen throughout most of the UK. Following the referendum result 3 weeks ago we have noticed more buyers than tenants waiting to see what strategy is put in place by the government and whether any current property laws and taxation are to be reformed before making any purchases.
What Is The Future?
The future is for many ambiguous, but with Theresa May becoming the new Prime Minister it could see things calm down. It will take 2 years to officially leave the EU once the Lisbon Treaty is officially declared, so we have a lot of time to make adjustments. But don’t forget, we are the 5th biggest economy in the world and we are always going to be a country people want to visit, reside in as well as trade with. In the next 6 months or slightly longer, people will lead with caution but in the long term our outlook could be a prosperous one. Could leaving the EU be our greatest decision yet?