Brexit: Are you in or out?
In just a couple of weeks’ time the British public will go to their local polling station and decide on the future of the country. Whatever the result, there will be implications on the property market, let property management software help you deal with them.
This unique moment in political history seems to have drawn more confusion than clarity as campaigners for both sides have failed to provide clear arguments. Nobody is quite sure what will exactly happen once the results are announced either way and it is that uncertainty that is playing havoc on the property industry.
For the third year running political upheaval has stalled the market prior to the vote but when the results came in, the market bounced back.
Elections come every four/five year so that doesn’t come as much of a surprise but the effect of referendums, before and after are a little harder to predict. The Scottish vote to stay or go from Britain had major implications for property and the ‘Brexit’ vote is having a similar effect. The campaigns have been messy, the polls suggest that it is going to be a close call, then again, can we really trust polls after they got it so wrong at last years’ General Election.
It is that uncertainty which is stalling the market once again, both residentially and commercially as either sets of campaigners give conflicting arguments. Nobody really knows the true effects it will have on the economy.
Over the past couple of years’ experts in both property and the economy have predicted another crash in the market as it recovered quickly, however it has failed to materialise. The ‘in’ and ‘out’ campaigners have stated that a crash will happen if we don’t vote the way they want us too.
Every decade or so a recession happens and that has a knock-on effect to property. It has been 8 years since the last crash so whether we vote ‘in’ or ‘out’ another market crash is expected at some point.
Although we are just a couple of weeks away from voting commercial investors are trying to avoid this slump. According to Bank of England, transactions in the commercial sector fell by 40% in the first quarter as buyers fear a price drop if exiting the EU is the winning vote. To push sales through they are offering buyers the opportunity to walk away from the purchase if that is the result. These clauses, mostly on high-priced properties have increased as the EU Referendum draws closer and it isn’t just commercial investors using them, some residential sales have seen a ‘Brexit money back guarantee’ too. Other clauses to push sales before the vote have included a price drop on the purchase to match expected values.
The ‘in’ campaigners have warned that the economy should suffer dramatically, leading to a drop in property prices if we leave the EU whilst the ‘out’ campaigners have suggested that not only is that argument overblown but Britain could prosper away from it. These statements share similarities to 2014’s Scottish Referendum. Foreign investors, who have been ploughing a lot of money into UK properties are worried that the pound will weaken if Britain is no longer in the EU and an appetite to deal with the UK could be lost.
If the result is to stay in the EU then the industry is likely to see a boom like it did when Scotland remained in the UK when properties flooded back on the market as confidence was restored and the future was no longer unknown. Should the majority vote to leave then changes are likely to be more gradual.
Whether we remain in the EU or go our separate ways there will still be a property industry in the UK which will need to be managed.
Book a demonstration of our property management software to see how it can help you work more efficiently and prepare for the future, whatever that will be…