The UK should guard against ‘media sensationalism’ that could talk us into a recession, Conveyancing Association chairman Eddie Goldsmith said.
He expected the housing and mortgage markets to experience a period of nervousness for a number of months before picking up again later in the year, although he predicted the London market experiencing a short-term boost because of the weakness of the pound.
Goldsmith said: “What we should however guard against is media sensationalism creating widespread panic which effectively talks us into another recession; instead, with the vote being what it is, the powers that be have to bring as much stability and certainty to the overall economy and the markets as possible to make sure the predictions of doom do not come to fruition.”
He added: “There is therefore likely to be a period of nervousness in the housing/mortgage markets which could last for a number of months – for instance, we could see a reduction in housing transaction numbers until consumers/borrowers are more certain of what the position is.
“However, once this has settled down, I anticipate the market picking up again later in the year. People will still need to move, lenders will still need to lend and with mortgage pricing remaining highly competitive this could actually prove to be a good buyer’s market.
“With the ball being in the buyer’s court we may well see some hard negotiation on prices resulting in a short-term fall. In terms of Bank Base Rate I suspect it will stay the same for the immediate future however the Bank of England MPC does have the option to cut it further later in the year should it feel the need to stimulate the economy.
“As always the housing market across the UK is different, region to region. The London market, for instance, may well gain a significant short-term boost because of the weak pound although I suspect foreign investors will also want to wait to see how the market plays out.”