Who ever said politics was boring! Now we know the result of the referendum, which we have all been discussing over the past few days, here is what we think will happen now.
First of all I want to reassure everyone involved with Redbrik that we have been keeping an open mind to which way the result may fall, so we are well prepared to answer any questions you may have now the UK has voted narrowly to ‘Leave’ the EU.
So here is what we believe.
First of all the housing market is rock solid. Yes, the markets will be volatile for the next few days or weeks, but they will settle down. Traders make money out of volatility and so there will be some interesting looking graphs, but it will stabilise soon enough.
All key economic factors show more housing is needed and growth in the market is still expected, though it might now be a bit slower than previously thought.
Interest rates are likely to stay at the same levels or may even fall, keeping mortgage rates where they have been or lower. The UK credit rating might be lowered, but the Governor of The Bank of England has confirmed our banks in general are well set and have adequate capital reserves.
I thought it was very important that the Bank of England governor Mark Carney came out yesterday morning and said what he did, he was at his most calm and impressive. It is great to have an independent Bank of England that we know will make the right decisions for the economic benefit of the UK.
With this is mind; there is no need to talk ourselves into a downturn in the property market. House building in general may stall a little, but that fact could actually push prices as demand still outweighs supply. And with interest rates set to remain low or fall further and pensions suffering from the volatility of markets, it is likely that people will look to property investment as the safest place for their money. The rental market is fantastic and the number of tenants looking for good quality housing remains at an all time high.
Whichever way you voted we cannot change the result, it is now time to make the UK’s decision work and look forward. It is what we in the UK are good at.
On a personal level I was disappointed with the voting and, to me, 51.9% (of 72.2% of the population – effectively a third) is not enough of a margin to force a mandate to leave, any ‘special resolution’ in business requires 75%, but the rules were known before we all voted and we now move forward.
Yes there may be some uncertainty – that is normal in an unprecedented situation – but this does not feel like 2008. Confidence in the market remains high and while I expect house prices in London and the South East to fall initially (and recover quite quickly), where we live and work there is very little that will change.
To that end I can report that has been very much business as usual at Redbrik, indeed as I am typing from our Millhouses office we are securing a buy-to-let investment purchase in Sheffield 10, offers have been coming in and yesterday alone we had eight instructions to sell home movers properties!