Friday, 15 July 2016

Brexit: and house prices in Devon

There have been concerns about the property market since the EU referendum:
Futures Forum: Brexit: and housebuilders in East Devon
Futures Forum: Brexit: and housebuilders in East Devon: part two
Futures Forum: Brexit: and commercial property in East Devon

Before the vote, the Devon press had reflected anxieties about the effects of any Brexit:

House prices set to drop for first time in four years amid Brexit fears

By WMN_PGoodwin | Posted: June 09, 2016

House prices are heading for a short-term dip amid uncertainty over the EU referendum outcome, according to surveyors. But despite the prediction, experts in Devon and Cornwall say there will be no decline unless there is a British exit from the EU, a so-called Brexit. The warning comes after the South West saw a drop of 0.9% in a single month in March,

House prices set to drop for first time in four years amid Brexit fears | Plymouth Herald

Immediately after the vote, the Mail was quick to dismiss earlier scaremongering:

What will really happen to house prices, fuel bills and taxes? We debunk the Brexit myths so you can plan YOUR family finances

Is there any truth to warnings of house price falls, tax and price rises?
Former BoE Governor Mervyn King said claims were grossly exaggerated
Property watched closely - but buy-to-let rush may cause fall not Brexit
Petrol prices will rise due to falling pound against the dollar 

Savers, borrowers and shoppers have been targeted for months with scare stories designed to stop them voting to leave the EU. But all the doom-mongering fell on deaf ears.


House prices are likely to wobble in the coming months. But warnings of a massive crash are far-fetched. Even if there is a slowdown, it could be short-lived. Ahead of the vote there was a great deal of scaremongering about the impact on the property market by the Chancellor, George Osborne, and his Treasury flunkies. They said prices could collapse by a fifth in the event of a Brexit.

But the prediction was part of a highly disputed analysis that hinged on the economy shrinking rapidly. This week, Mervyn King, the former Governor of the Bank of England, tore into the predictions, calling them an ‘exaggeration’. One reason house price rises could stall is a lack of confidence among buyers. If people worry that their jobs are at risk, they’re less likely to borrow large sums to plough into property.

But it’s more likely that prices will keep rising — albeit at a more sustainable pace. Underpinning Britain’s housing market is a simple equation: there are more people who want to buy than those who want to sell. That’s unlikely to change even if immigration levels fall.

Mr Osborne’s own housing policies will arguably do more damage to the housing market than Brexit. By charging buy-to-let landlords 3 per cent extra on stamp duty and removing tax breaks for higher-earners, prices could start to fall for small and medium-sized family homes.

The other side to this is that a slowdown or slight dip in house prices could work wonders for the younger generation, who are finding it tricky to get on the housing ladder. Many are turning to their parents or grandparents for help with deposits to get a first home.

Brexit myths: What will happen to house prices, fuel bills and taxes? | This is Money

However, yesterday's FT was more sanguine:

Brexit puts brakes on house buys

Sector takes nosedive with a drop in purchase inquiries and sales, and expectations of lower prices

YESTERDAY by: Chris Giles, Economics Editor

Britain’s housing market has taken a post-referendum nosedive with a sharp drop in purchase inquiries at estate agents, a reduction in sales agreed and expectations of falling prices.

In its latest survey of estate agents and surveyors, conducted after the June 23 vote to leave the EU, the Royal Institution of Chartered Surveyors found a “marked drop in activity in the housing market”. The monthly survey is a leading and closely watched indicator of house prices and economic activity related to moving home. The latest results provide the first nationwide confirmation that the Brexiters’ victory has put the brakes on house purchases and related spending.

New buyer inquiries declined significantly across the UK in June, Rics said, with 36 per cent more chartered surveyors reporting a fall in interest than those reporting a rise, the lowest reading on this measure since 2008. London and the south of England were hit hardest. A large majority of estate agents believe house prices will fall over the next three months — in sharp contrast to the view expressed to Rics in the May survey, when most thought prices would rise over the coming year.

Brexit puts brakes on house buys — FT.com

Another business paper does not pull its punches:

3 devastating charts show how Brexit is about to kill house prices

Ben Moshinsky Jul. 14, 2016

Brexit is going to kill house prices, says the Royal Institute of Chartered Surveyors in a new report.

But we were warned about this already. Before Britons voted for the UK to leave the European Union on June 23, the Remain campaign, backed up by Treasury analysis, stressed that a Brexit would reduce UK house prices.

RICS said on Thursday that new buyer enquiries "declined significantly" in June, with 36% more chartered surveyors reporting a fall in interest as part of the June housing survey. This is the lowest reading since mid-2008 when the financial crisis was in full swing.

RICS charts: Brexit impact on UK house prices - Business Insider

This - and other downbeat stories on property - has been widely reported in the Devon press:
Surveyors report sharpest fall on record of new homes coming on market (From Mid Devon Star)
Bank of England chief economist paints bleak post-referendum picture (From Mid Devon Star)
Brexit 'could hit UK property market for years' (From Mid Devon Star)

And by Devon estate agents:
House price growth slows during Brexit... - Brights of Bideford

Although a website dedicated to moving to the West Country is more upbeat:
Brexit and the South West Housing Market - Relocate SouthWest

Meanwhile, housebuilders are not building quite so much:
Sharp fall in UK housebuilding drags down construction sector | Business | The Guardian


Unknown said...

Hello..... One way to sell a house that has been in the market for a long time is to motivate the real estate agents. I have learned that reducing the price of the house in order to make it more attractive to buyers doesn't work much. Instead, increasing the commission of the agents is a better way of getting fast action in selling a property. Inform all agents about your new commission scheme and you'll see that they would be scrambling to get your house sold quickly for higher commissions.Read more-house sold prices

Unknown said...

I read your blog, its really awesome,
I am seeing that you are selling home. I have also a site related to you.
Rent to Own sounds great! What better way to work toward buying a house. But is it risky? What questions should you ask? What should you look for?

rent a house

Your regards
Alfaj Ripon