June saw the European Union (EU) referendum take place, with many experts predicting that a vote to leave would have a catastrophic effect on the housing market, leading to great uncertainty for buyers, sellers and conveyancers alike.
Prior to the referendum, many firms that specialized in residential conveyancing experienced fee growth of 15.4% on average in 2015, with commercial conveyancing fees rising by 8.7%. The property market was strong and provided firms with a steady income stream.
However, Nigel Haddon, Law Society Management Committee member, mentioned the slow-down experienced by various legal firms since the decision to leave the EU, “perhaps caused by referendum-induced uncertainty, by increases in stamp duty in the buy-to-let sector, or just a sense that we may be not far from the end of this cycle.”
Online property agent, Zoopla further predicted a vote to leave could reduce the UK’s housing stock value by £1.5 trillion.
A “doom and gloom” scenario began to emerge with the widely expressed opinion of the experts being that sales of property would suffer. Surprising to most however was that this did not appear to be reflected in transaction figures.
One leading Estate Agent stated that the number of buyers withdrawing from transactions had increased by 11% in comparison with June of 2015. However, they also stated that over the weekend following the decision, the number of new applicants registering (1,500) was the same level as the previous year.
The CEO of the said Estate Agent stated: “While it’s true we have seen some buyers pull out of transactions due to the uncertainty caused by the Brexit vote, the effects haven’t been as great as we anticipated and we expect this to be a small blip as people come to terms with the result and get their head around what a Brexit means for them.”
Although at the time these figures may have been viewed as the calm before the storm, 3 months later the dramatic change the market was set to suffer has not been quite so dramatic.
Although the rise of house prices is slowing, nationwide there is still growth. Figures from a leading expert’s September report indicate a growth of 0.7% in comparison with August, with 7 out of 10 English and Welsh regions observing prices remaining steady or growing by some margin.
A further catalyst for market slowdown may be the increased stamp duty, introduced in April of this year.
However, property sales may receive a lift from various other factors, including the reduced interest rates in August and the drop in the value of the pound.
Despite these various market boosters, predictions for next year offer a more plateaued picture. It is believed that two quiet years lie ahead due to the result of the EU referendum and weaker consumer sentiment. Experts predict that the average property price will remain consistent during 2017, with 2018 observing a modest 2% rise.
It would seem that the effects of Brexit were not as devastating to the housing market as the experts predicted. The market has remained steady and predictions appear to be that it will continue to remain that way for the foreseeable future.
Should you require assistance with any property related matter, then please contact the Residential Property Team at your local Thursfields office.