Rogers & Norton News

Conveyancing

Confidence Returning to Property Market as Year of Uncertainty Draws to a Close.

Tuesday, November 8, 2016

As we approach the end of the year, it would be something of an understatement to say that 2016 has been unprecedented in its news events. We have seen Team GB break records at the Rio Olympics; we have lost too many of our beloved stars of stage, screen and music; Tim Peake returned home after six months in space; the Queen turned 90 and The Great British Bake Off moved to Channel Four. It has certainly been a rollercoaster of a year.

Undoubtedly, however, the story that has continued to dominate the press during 2016 is the ground-breaking result of the EU Referendum.  On 24th June Westminster, Britain, Europe and indeed the World were left in shock as we awoke to the momentous decision that Britain had voted ‘leave’.

Following the result, the subsequent resignation of David Cameron, the political instability that ensued and the Bank of England’s decision to cut interest rates, the impact Brexit would have was at the forefront of everyone’s minds. The initial predictions for the future of the UK’s markets, in particular the housing market, looked bleak. Headlines prophesised house prices collapsing, a dramatic fall in transaction levels and a reduction in affordable housing.  The message was clear, the property market was heading for catastrophe.

Four months on and the dust has settled.  Whilst the divorce proceedings have not yet formally begun, the grave predictions made in the wake of June’s referendum decision have thankfully not materialised.

The National Association of Estate Agents reported a 16% month on month rise in demand for properties in September 2016, bringing a return to the levels seen in June prior to the Brexit decision – this is in addition to a rise in the number of recorded sales. They also state just one in ten estate agents have seen sales fall since Brexit, whereas two in five have witnessed no change in activity at all. The Royal Institute of Chartered Surveyors has also reported an increase in the number of new buyers during September.

Mortgage approval rates rose in September which, although lower than approval rates twelve months ago, goes further to suggest the increased stability of our housing market in recent months.

House builder Persimmon have reported its private sales rate in the period was 19% ahead of last year and that the firm is “fully sold up” for the current year. We have also seen growth in the UK construction industry hit a 7 month high in September.

What this clearly demonstrates is that Britain is bouncing back and confidence levels are returning following initial anxiety.  A report by market analysts IHS Markit found almost three quarters of British homeowners are confident that the value of their property will increase in the next year.

Whilst there is still a way to go until Britain’s exit from the EU is complete, the signs do indicate that whilst the housing market is likely to be subdued over the next two or three years, growth will continue before rebounding fully by 2020. We can expect many more Brexit dominated headlines during 2017 as Article 50 is triggered and negotiations begin, but if the property market can continue to demonstrate the stability shown during the summer, the outlook for homeowners will be far less bleak than first feared.

Residential Conveyancing Director in Norwich Steve Clarke, Commented “we have had a record year in the conveyancing departments at both Norwich and Attleborough offices, with a growth in business of over 30%.We like to build strong relationships across the business and look to support clients who come to us direct and those that are referred on to us from other professional firms in Norfolk. This strategy has proved highly successful and means that we are well place to build on this strong performance in the future. Our experienced and knowledgeable team can offer advice and support on a wide variety of housing matters, from helping to guide the inexperienced first time buyer, to assisting a portfolio building buy let investor and the property developer planning to build multiple houses. It’s gratifying to see that market indicators for 2017 are good and that we are well placed to help more people in Norfolk buy a house.”