The property market is bracing itself for, at best, uncertainty and confusion, and at worst a white knuckle ride after yesterday’s High Court ruling that MPs must vote on triggering Article 50.
Yesterday, as the BBC reported on the possibility of a constitutional crisis, the pound rose in value while speculation grew that Theresa May will call a snap general election.
Ladbrokes slashed its odds on a general election next year to 2/1.
Spicerhaart boss Paul Smith told EYE: “Yesterday’s government defeat by the High Court regarding whether the UK can start the process of leaving the EU is unwelcome news for the residential property market.
“This decision will elongate the process of Britain leaving the European Union reigniting cause for a lack of confidence among buyers, sellers and house-builders.
“It cannot be emphasised enough how much the residential property market is reliant on confidence, and as we currently see a market that is suffering from almost record low transactions levels, especially in the capital, it is now more important than ever that clarity is provided.
“What we need to see is a quick, clean break from the EU, rather than dragging out the process which yesterday’s ruling may now do. Britons have voted to be free of the EU, and their wishes should be respected with a clear exit strategy.
“Our property market has in the past proved robust, and bounced back in terms of adversity. However guarantees of future stability would certainly not go amiss.”
Smith also warned MPs not to abuse their votes. He said: “The people have decided on Brexit and Parliament should not stand in the way of the will of the people. Brexit means Brexit.”
Another industry figure warned that agents will “see the price of Brexit in their bottom lines”.
Property pundit and buying agent Henry Pryor yesterday told EYE: “Markets hate uncertainty so this will result in more people putting their moves on hold whilst they await clarity – something that is unlikely to come in the short term.
“Turnover and prices are sure to come under pressure, but the good news for agents is that more people will want advice rather than just process which should mean more pitches. Key to converting this into income will be to provide reassurance.
“Most home movers are trading so absolute prices are not essential if what they want to buy is cheaper. The best agents will inspire confidence and clients will respect and pay for this.
“Longer term I expect that we are all going to see the price of Brexit in our bottom line figures.
“Deals will be harder to do, harder to hold together and harder to get paid for.
“Service rather than process will count, I expect, as consumers come to appreciate that selling or letting, buying or renting, isn’t just a case of sticking something up online and processing the resulting interest.
“Whether you voted remain or leave, you are about to witness one of the more memorable episodes in the housing market and some will not cope well.
“There will be arguments, sharp practice, ill-mannered discourse, but the best firms will win out because they deliver something that the public wants and will pay for.”
More upbeat was Glynis Frew, managing director of Hunters Property Group, who said: “This decision could bring further uncertainty to the country, and a period of stability would be welcomed by the business world. However, at the end of the day the property market is essentially driven by lifestyle factors: people will continue to get married, relocate for new jobs and start families, whether Brexit goes ahead or not.
“These lifestyle changes bring with them a need to move house and therefore create churn in the market. In addition , yesterday’s announcement to hold interest rates steady is welcome news for the property sector. ”
Camilla Dell, of London buying agency Black Bricks, said: “Yesterday’s outcome will likely delay the triggering of Article 50, thus creating an even longer period of uncertainty, which isn’t helpful for sellers or buyers.
“However, the fact that Parliament needs to vote, may also mean a less harsh Brexit takes place in order to get the vote through.
“In the long run, I don’t believe it means we aren’t leaving the EU. We will be leaving, but perhaps not as quickly or as aggressively as the prime minister had hoped.”
Stephanie McMahon, head of research at Strutt & Parker, said: “We didn’t know when Article 50 would be triggered before, and after yesterday’s court case we still don’t know.
“On a positive note, it is good news that formal exit negotiations with the EU will be properly debated, as they should be.
“On the other hand, a further hearing is expected later this month and because the ruling is likely to go back to appeal, we can’t really comment on the potential impact at the moment. Our forecast for UK house price growth in 2016 is 5%, and we are predicting the same 5% for 2017.”