Predictions suggest triggering of Article 50 'will not be negative' for housing market
Article 50 has now been triggered, beginning the next two years' worth of processes that will result in Britain leaving the EU. Despite the event being historic for the country, leading experts are not expecting it to have much of an impact on the property market.
While previously predictions suggested that Brexit would cause the housing market to crash, it seems that those in the industry are a little bit more hopeful, especially considering how it has performed since the results of the vote were announced in June.
David Westgate, chief executive of Andrews Property Group, believes that Brexit will not have much of an effect on the UK's housing market. He explained: “My fundamental belief is that Brexit is irrelevant to the domestic housing market. Quite simply, there is no direct reason why it should have any impact on either property prices or where people chose to live.”
He continued to say that although the triggering of Article 50 does mean the start of a time of uncertainty that may affect confidence in the market, at the end of the day it is demand that drives it. As current demand is high, it is unlikely to result in decline in the housing sector.
James Evans, chief executive of Douglas and Gordon, also has a positive prediction for Britain's housing market. He said that the number of sales agreed actually increased by around 11 per cent a week after June's referendum and this trend has continued.
“When we look back at the relatively low number of transactions in 2016, the likelihood is that many sellers simply weren’t confident in the true value of their home. But for buyers, this created the strongest buyers’ market since 2009, with more choice and less competition," he said.
“As every new landmark is ticked off the Brexit timeline - and the triggering of Article 50 is a big one - the property market gets another little boost of stability, encouraging people to get on with their lives."
Mr Evans continued to explain that years that have seen low numbers of transactions in the sector are usually followed by increased activity. As confidence is returning to the market, sellers are already raising their asking prices, which is likely to continue.
However, not all predictions about the future of the UK's housing sector were positive. Jeremy Leaf, north London estate agent and former Royal Institution of Chartered Surveyors (RICS) residential chairman, highlighted the fact that transactions are falling.
“The housing market has held up much better than everyone feared but the undercurrents of uncertainty are still there with the number of transactions falling steadily since the vote," he said.
“Inevitably this is having an impact on the market with prices softening, particularly in London, which has also been affected by the increases in Stamp Duty and unsustainably high prices for a long time."
Mr Leaf went on to explain that there is an expectation that prices will "continue to be underpinned" by the lack of housing stock and that the falling number of transactions is bad for the UK's economy as a whole and not just the housing market.