Richard's July reflections
28 Jul 2016 |
Wow, we voted for Brexit and then total carnage: days and days with no one at the helm, then a new Prime Minister, next a new leader of the opposition, now what?
A brave new world? Mmm, not a great deal of change really. Some chains have fallen through, some have been renegotiated, volumes are down a bit (estimates vary between 5% - 20%), but have we hit another 2008? I don’t think so, not yet anyway.
So what’s going to happen from hereon in? When are things going to get better again? Is Brexit even going to happen? Let me clear the mists in my crystal ball and see if I can make an educated guess. Let’s start by lining up a couple of the ‘facts’ from recent weeks:
> Theresa May (who would have voted ‘remain’) is not going to invoke Article 50 until 2017;
> The majority of MPs would still vote to remain;
> The UK is a net importer of goods and services from the EU;
> Arguably many of the ‘leave’ campaign claims are unsubstantiated (I’m being kind here!).
It’s the first one of these statements that interests me the most: at a time when confidence has taken a hit (and will continue to do so because of uncertainty), the last thing we need is any delay in leaving. Politicians are many things but most of them are not stupid, so I assume that Theresa knows this. In which case she has made this decision based on something else. So what is that?
Both sides desperately need good news stories (as does the rest of the world). So, my guess is she is utilising all the time available to make sure the civil servants and Eurocrats (already frantically burning the midnight oil), find a solution where everybody wins. I don’t think that she even thinks that she will have to invoke Article 50 or if she does it will merely be a symbolic act.
So, in short, there will be a fudge (naturally)! The UK will have access to the free market as a trading partner (but will pay to be an ‘Associate’), and there will be a restriction on free movement of labour (or the promise of it). I expect to hear announcements about negotiations on this starting towards the end of August/early September, so no summer holidays for some.
What does this mean for the property market? There is no question that the current uncertainty is affecting domestic demand along with the usual summer holiday slow down. On top of this there has been a certain amount of price adjustment which will take a while to filter through to sellers, so there may be more to come. However, with the weakening of GBP Sterling comes the potential of increased foreign investment in London. So, my guess is that transactional volumes will continue to be uncertain and down on last year (maybe 10%) until the turn of the year, but once we know where we’re heading that extra 10% will rapidly return to the market.
And, in amongst all this excitement there has, of course, been the introduction of the new Con29 (2016), with 30 new questions. As you might expect local authorities need some time to get used to this and TATs have been affected accordingly. In June many slowed down in preparation for this and subsequently those who didn’t prepare have been struggling. Many still don’t have the information to hand and I anticipate TATs being one or two days slower across the board for a couple of months yet. The worst offenders are now:
As usual I try to pick out a few stars and authorities where there were some notable improvements:
Allerdale 35 to 10 days Christchurch 21 to 9 days
Worcester City 14 to 8 days Lambeth 21 to 17 days
Newark & Sherwood 17 to 13 days
West Dorset 33 to 15 days
I hope you all have a great summer, if I’m right, when we all get back from our holidays we will have some good news, or at least an indication of good news. I don’t know about you but I’ll take that!