After much debate and speculation, history was made when the UK people voted to leave the European Union. The Margin of victory for the ‘Leave’ campaign was narrow, at 51.9% to 48.1%, the turnout of 72% was high by the standards of recent General Elections. The UK will therefore leave the EU at some point in the next few years, becoming the first member to leave the Union. This came as a surprise to many people. No one really knows what the full impact of this decision will be. Apart from the predictable impact this has had on the strength of the pound and the Stock Market. We may not see any significant changes for a few years whilst the details are worked out.
What will happen to the property market? Interest rates will play a key role. Mark Carney the governor of the Bank of England has stated the UK’s financial system is much more robust than was the case at the time of the financial crisis. Banks are better capitalised and have been stressed tested using scenarios more severe than that implied by Brexit. The next scheduled Monitory Policy Committee is due to meet on the 14th of July and it is likely that the current bank rate will remain on hold at 0.5% and is expected to remain at this well into 2017. The Bank of England have said that they will do whatever it takes to keep the economy on an even keel and that they have the funds to do so.
It may well be that interest rates may fall further to an all time low allowing more first time buyers to enter the market. The fundamentals of the UK property market are that there is a shortage of supply; we live on an island with a limited amount of accommodation and an increasing population. Over a period of time, it is most likely that values and rents will continue to rise. We are members of the Relocation agency network with over 600 offices in the UK. Are immediate network neighbours in Cheshire, Wirral and Shropshire, whilst having seen a slow down prior to Brexit, all report more enquiries and improved sales after Brexit. The message from us is to keep calm and carry on and we intend to do so.