Henley Property Blog – What Does Brexit Mean For the Property Market?

brexit-logoUncertainty.

For every report I have read saying how bad it will be to leave Europe, there is another outlining the upsides. Some are more emotional and romantic than others, and some are avidly statistical, but it is clear that there is not one “right” and one “wrong” decision to be made.

The polls are no more help with the BBC EU Referendum Poll for both the last 30 days and last 6 months having the votes tied at 41% each.

One of the fundamental underlying drivers for the property market is confidence. If we all think it is going swimmingly, we will happily go out and buy or sell property, apply for mortgages and invest in the future. If we think it is about to go bad, we hold off, think about things a bit longer and wait for an indicator. Only those who need to move will, rather than those who want to move. Having been through three recessions since the mid 80’s, I have found it has always been this way.

If we all voted to leave the EU (or a vast majority) it would be what we all (or most) wanted, and so confidence would be higher than if we left by a marginal vote. The counter argument also applies. External factors such as interest rates will have an effect, particularly if they increase dramatically, but that is a source of conjecture at the moment too. I was recently at a Brexit debate and one of the Leave candidates produced some details statistics that if we left the EU the economy would shrink by 3.6%. He then went on to say that if we stayed in the EU, the economy would still shrink, but by less (0.4%). So no easy ride either way.

The property market is surprisingly resilient so either way I expect transactions to pick up, as at present there is a sense of expectancy as the Referendum date draws closer. What happens thereafter is not truly predictable, despite Mr Osborne’s belief otherwise. If people want to move, they will.

So no crystal ball I’m afraid, but all I can say is if we are mostly happy with what happens either way it will be business as usual. Watch this space.

Trevor Michel
Simmons & Sons

www.simmonsandsons.com

1 comment
  1. Graham says:

    Another case of “Nobody knows” what the future will be.
    My view is, and has been for many years, that we, in Britain, should leave a failing Eurpean Union.
    Just consider Iceland, which is not part of the EU and suffered more than most in the financial crisis mainly because their bankers were more greedy. The people took hard decisions, let the banks fail and prosecuted the bankers. As a consequence, Iceland is now recovering faster than any other country in Europe. Britain, outside the Eurozone, is doing better than the Eurozone.
    So, whilst nobody knows what the future will be, based on the experience of Iceland and Britain, we can expect to be better off leaving.

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