Brexit: industry at loggerheads over its impact on the market

Two very different views on Brexit have come forward in the past 24 hours from different players in the industry.

First off, a comparison website claims that Brexit-inspired price drops combined with estate agents’ fees mean that the typical vendor will spend almost £22,000 to sell their home.

GetAgent looked at the current cost of selling across the UK based on the average estate agent fee on the average price achieved in each location, combined with what it claims to be Brexit-created market conditions that mean vendors actually sell for below asking price.

The suggestion only holds water if one believes that without the current Brexit controversy, homes would be selling at their full asking prices: many agents may dispute that.

However, the GetAgent data shows that with an average fee of 1.25 per cent UK home sellers spend £4,568 in fees. 

And with the average seller in Britain only achieving 95.5 per cent of asking price, they are having to adjust their price expectations to a further loss of £17,154. 

In total, the cost of selling on average is now £21,721 but the website says it’s much more in London where the Brexit-inspired slowdown has been at its most severe.

Westminster tops the table where sellers are achieving just 90.9 per cent of asking price, so a reduction of £284,528 in property values coupled with a further cost of £50,347 for the average agent fee of 1.8 per cent. As a result, it’s costing home sellers in the borough an eye-watering £334,874 to sell now. Kensington and Chelsea (£210,521) and Camden (£144,439) are also home to some of the highest fees coupled with the biggest reductions in asking price.

Windsor and Maidenhead is the most costly market outside of London with the average fee of 1.5 per cent costing £16,133, coupled with an asking price adjustment of £83,285, totalling £99,418.  

While GetAgent’s data shows that no area of the UK is currently enjoying above asking price home sales, the current cost of selling isn’t as crippling in every area of the UK.

With the average fee of 1.3 per cent costing just £2,589 to sell a home, and sellers achieving a healthy 98.6 per cent of asking price, Sheffield is the most affordable market for a current property sale, totalling just £5,385.  Kingston upon Hull (£5,903), Salford (£6,098), Torfaen (£6,652) and Sandwell (£6,926) are also amongst the most affordable areas to sell in current market conditions.  

“In any market, home sellers always tend to be over optimistic in their asking price expectations and so achieving below this benchmark isn’t just Brexit related: however, at the moment we’re seeing many have to accept as much as an eight to 10 per cent reduction in order to secure a sale which is far from normal” suggests GetAgent founder and chief executive Colby Short.

However, agency Jackson-Stops says its figures paint a different story.

It says that although recent reports have suggested that many would-be sellers are being deterred by Brexit, its figures show that seven in 10 homeowners who planned to sell their property this year are not deterred by the political uncertainty.

This figure is apparently only nine per cent lower than Jackson-Stops’ 2017 research which asked the same question of active home sellers.

Jackson-Stops’ data also reveals that in an event of a no-deal Brexit some 39 per cent of respondents say it would have no impact at all on their home buying decisions. 

Meanwhile, only 14 per cent believe a no-deal Brexit would have a strong impact on their decision to put their home on the market.

Perhaps surprisingly however, 37 per cent say they would consider moving outside of the UK because of Brexit - and three per cent are in the process of doing so, either buying a main or additional home abroad for that reason.

Nick Leeming, chairman at Jackson-Stops, comments: “It is positive to see so many respondents unfazed by the prospect of the country leaving the EU … Therefore, we must look to other underlying market fundamentals, such as punitive stamp duty charges, as a remedy for creating more movement throughout the property market. Our latest data shows that the constant ‘will we or won’t we’ debate on when the UK will leave the EU is no longer a dominant factor in people’s homebuying and selling decisions.”