Seismic. A political earthquake. Unprecedented.
In the early hours of 24 June, the superlatives started to fly as it became clear that the British public had voted to leave the European Union. The political ramifications were immediately apparent: within hours, David Cameron had resigned and Boris Johnson was being talked of as his successor. The financial markets and the pound plunged.
Yet in property terms — as with so much else connected to this historic vote — it's unclear as to what could happen next.
Melanie Leech, Chief Executive of the British Property Federation, summed up the mood of many property experts and analysts, however, with her statement. “The priority for the government and the Bank of England must now be to stabilise the position and maintain confidence in the UK,” she said. Depending on what side of the remain/leave divide you are, this is either a desperately worrying and uncertain time — or the beginning of an exciting new era of UK growth and opportunity…
It's a good question but, sadly, it's one that won't be answered definitively for a while. The Financial Times raised concerns on the day of the Brexit result by reporting that “that UK’s house price boom is set to come to an abrupt end” with “estate agents and analysts… predicting an immediate slowdown in transactions and a halt to the steep price rises of recent years.”
Mortgage rises: The Bank of England is keeping a close eye on the markets. While, at the time of writing, interest rates haven't risen, expect variable rate and interest only mortgages to increase if they do (which would also affect renters as costs for landlords would increase); although it is also possible that rates might have to fall to provide liquidity and restore order to markets.
House prices: The IMF has warned that Brexit could trigger house price falls, while the Treasury has estimated that prices could be affected by between 10% and 18% over the next two years. Right now, it's a case of watch this space.
House sales: Property experts have noted, obliquely, that “sales will take at least a short-term hit” while others have been more specific, noting that sales could fall by up to 10 per cent nationally. Of course, this is a situation that is still in flux and none of this may come to pass. But if you have any concerns or questions about how Brexit might affect you and your house sale, don't forget to ask your estate agent for advice.