Article 50 may be huge for UK but housing market stays calm

The triggering of Article 50 may have been regarded as a historic event but it appears to have left the housing market largely untouched.

“My fundamental belief is that Brexit is irrelevant to the domestic housing market.  Quite simply, there is no direct reason why it should have any impact on either property prices or where people chose to live” explains Andrews Property Group chief executive David Westgate.

“Whilst some will argue that change leads to uncertainty and that, in turn, uncertainty affects confidence in the market, we should hold on to what we know and that is simply that the key driver of the housing market is demand, and that is extremely high at the moment” he adds.

Former RICS residential chairman and north London estate agent Jeremy Leaf says the market has held up since the June referendum much more healthily than many anticipated - but he says there is no cause for complacency.

“The undercurrents of uncertainty are still there with the number of transactions falling steadily since the vote. Inevitably this is having an impact on the market with prices softening, particularly in London which has also been affected by the increases in stamp duty and unsustainably high prices for a long time” says Leaf.

“The stamp duty changes and other obligations on landlords should in theory give first-time buyers more of an opportunity but lending restrictions haven’t really made it much easier for them. Looking forward we expect prices to continue to be underpinned by shortage of stock but the low level of transactions is bad news, not just for the housing market but for the wider economy” he adds.

Mark Lawrinson, regional sales director at Portico, says: “I don’t think the triggering of Article 50 will affect the property market directly from today. In one sense it removes the uncertainty surrounding when Britain’s withdrawal process from the EU will start, but in another way it will create economic uncertainty until we know what deal we will strike and therefore what Brexit actually means for our country."

Meanwhile consumer expectations about house prices have bounced back to pre-referendum according to data from the Building Societies Association.

It says almost half of consumers - 49 per cent - expect house prices to rise over the next 12 months and just 10 per cent expect them to fall.

“The worst case scenarios for the economy immediately after the UK voted to leave the EU clearly didn’t come to pass, and this has fed through to people’s higher expectations for future house prices. However, we are only just starting the negotiations around the exit process. Consumer views on the housing market, and their prospects in it are likely to alter as the negotiation proceeds” insists Paul Broadhead, the BSA head of mortgage policy.

Broadhead also warns that as a result of this rebound in house price expectations, people are facing greater affordability challenges in buying their own home.

Over two-thirds of consumers - 67 per cent - report raising a deposit as their primary challenge to buying their own home, up from 64 per cent in December. And 49 per cent now say that getting a large enough mortgage is a barrier, up from 44 per cent in December.