The property market's brick wall
The property market’s brick wall – Kevin Shaw, Managing Director, Audley Group
A look at recent news from the property market doesn’t paint a pretty picture and it shouldn’t need me to tell you what is causing this doom and gloom. It’s the B word. Yes, Brexit is well and truly rearing its ugly head, and the uncertainty it brings with it is crippling the UK property market.
It’s been nearly two years since Article 50 was triggered and as the debate rages on, the property market is most definitely feeling the effects of a sustained period of uncertainty. On the residential side the impact is two-fold.
Would-be sellers are dragging their feet as they wait for the political and economic outlook to improve, and sellers with homes on the market are facing lengthy delays, dropping prices to lure buyers.
The most recent figures from Nationwide show that house prices fell 0.7% in December as the annual growth rate dropped to its lowest since February 2013.
And it’s not just property transactions that are suffering. Confidence in the UK’s financial stability is low, businesses are reticent about investing with such unprecedented levels of uncertainty and without the required funding, some of which may well be coming from abroad, the pace of land acquisitions are stalling.
Equally, commercial vendors are demonstrating the same caution as residential sellers, unsure whether they are just a few months away from a market which isn’t quite so soft and thus able achieve a more favourable price. We are already in the midst of a chronic housing shortage and while construction output manages to hold steady for now, delays in land buying will come back to bite us in the future.
Tomorrow the Government will vote on May’s Brexit deal and it’s pretty much a dead cert that it won’t pass through a quarrelling parliament.
This will bring the potential of a general election, pushed for by the opposition, into sharp focus amidst promises of Brexit deal renegotiation. Adding yet further turmoil and a fresh layer of uncertainty that will grip the country once again, if it ever went away.
If only the Government would listen to businesses, investors, house buyers, sellers, the people of the UK, they would hear the united voices screaming out for a decision.
For us at Audley, Brexit is delaying, and in some cases preventing, people moving into our villages.
These are real people, people who might have been planning this move for the last five years or people who urgently need access to the care support that Audley can provide.
There is also a secondary impact of the UK’s divorce deal that can’t be forgotten. With MPs tied up in negotiations there has been a slowdown in new regulation and government consultations. Anyone remember the social care Green Paper?
Historically the Government has been short sighted in its bid to tackle the housing crisis. The vital role that retirement housing plays in the mix has been widely ignored. And, while initiatives to support first time buyers, such as Help to Buy and Stamp duty relief, are welcome, they fail to address the whole market. Increasing provision of retirement properties, and encouraging retirees living in the circa £1 trillion worth of suitable family housing, has the potential to do more.
It’s unlikely that there will be any movement on this in the foreseeable future, but I hope by the next time I come to write a piece on the property market, there’s a clearer way forward, about which we can all be a little more hopeful.