Property in a Post-Brexit Market21 Feb 2020 // Insights
Co-Head of Residential Real Estate, Howard Freeman, discusses Brexit's effect on the market.
All we have heard in the residential property sector since June 2016 (following the referendum, when it was democratically decided that we would leave the EU) from sellers, buyers, developers, and dealers is, “we're not sure at the moment and will wait for Brexit to be sorted”.
That has been the theme when speaking to clients, other solicitors, and agents for the last three years and six months. Although there have indeed been transactions, they have been slow and tardy to get over the line through this period.
However, since the December election when the country voted unanimously for the conservatives, the word “Brexit” seems to be in steep decline. Whereas it seemed to be mentioned in every newspaper/tv programme on a daily basis, after the election, it doesn't seem to be the buzz word it once was. We saw a short spike on the 31 January 2020 when Britain left Europe, but again, it seems to have tailed off.
Even that short period before Christmas, there appeared to be a few more instructions than normal. It was like someone had put the lights back, not necessarily on full, but brightness had been restored. In January and February this has continued, and since then, the feel good factor seemed to return to the residential property market. Speaking with agents, there had apparently been more instructions received from Sellers and there are signs of life in the property market. Other solicitors seem to confirm they were busier again. Indeed, this has happened within our own Residential Property Department, with our fee earners were becoming frantic again.
As we are approaching the end of February, there is a lot more positivity. Phones are ringing and emails are being received, relaying positive news; “we have decided to sell” or “we want to purchase”.
I have also been instructed by two separate clients who have had offers accepted following a request from the seller via the agent for “best bids”. Other clients who have had small developments with flats to sell are now all under offer. Agents are now saying buyers need to move quicker and sellers are saying if the buyer does not wish to proceed, they will remarket at a higher price, something we have not heard for some time. The feel good factor seems to have returned.
How long will this last and can it be sustained? Confidence does seem to have been restored for the time being, and hopefully if the budget does not increase stamp duty, this upturn will continue. Furthermore, if the Chancellor were to reduce stamp duty, that could cement the upturn for the foreseeable future.
Ultimately, the property market needs transactions, willing sellers, genuine buyers, and good advisers for this upturn to forge on.