Is it just a question of confidence?
Richard Pike (pictured), sales and marketing director of Phoebus.
Uncertainty has been the watch word since June 2016 when the UK voted to leave the EU. As well as affecting many areas of the economy and our perceived “standing” on the world stage, there is no doubt it has had an impact on the housing market.
Our industry is historically cyclical, with highs and lows dependant on many factors. However, since June 2016 we have been unable to accurately predict what the highs and lows could look like, but it has deflated the purchase market and it is remortgaging that has kept the market going.
Market reaction seems to imply that it had already priced in Mr Johnson as the next Prime Minister. On the basis this would have also priced in the potential for a no-deal Brexit, from an economic perspective, this is probably a positive. Even the pound firmed up after the announcement.
However, it is a truly difficult call to make on how we will be affected by all the change expected in the next six to 12 months. From a housing perspective, Mr Johnson did bring stamp duty into the leadership debate and so he must recognise how important it is to keep housing growth moving. But, the reality is such policies will be well down the list of priorities, probably until at least the Spring budget. It will be interesting to see what Esther McVey brings to government in this high-focus area, of which policy hasn’t really gained any momentum over recent years.
With both UK Finance and HMRC reporting a fall in lending and property transactions, it appears that earlier more positive sentiment, the great British ‘Keep calm and carry on’ spirit may have waned as our political situation once again causes uncertainty. Now that Mr Johnson is PM, the question will be whether our future and the prospect of a no-deal Brexit will continue to weigh heavy on consumer confidence.
So, is it really just a question of confidence? At this stage you have to consider that there is an amount of apathy running through the country. Perhaps it’s the fact that people are fed up and just want to know what is going to happen after 31 October. Will potential house movers once again decide to sit on their hands and wait it out?
One thing that is for certain, the political landscape for the next six months or so will be both interesting and (probably) entertaining, but what this truly means for the country, the economy and our industry remains to be seen.