The EU referendum result has left buyers and sellers with a new dilemma: should they move now or wait for the dust to settle?
Leave or remain? It is the new referendum that divides opinion among the nation’s buyers and sellers almost as much as the shock vote for Brexit: should you move now, or sit tight? For the families of Acacia Avenue, this decision is likely to have more traction than when we trigger Article 50.
But, as with Brexit, it’s hard to know which experts to believe. The French bank Société Générale predicts a London apocalypse of 40%-50% falls in the most expensive boroughs, while the think tank Capital Economics forecasts a mere slowdown to 2% annual growth by Christmas — though it does expect transactions to dip 10%.
What has dropped is confidence. Exclusive data from YouGov and CEBR’s household economic activity tracker, a daily survey that polls 70,000 people each year, shows a 10% fall in optimism over future house prices. One in six now think their home will be worth less in the next 12 months, up from one in 11.
To make sense of the market, Home has spoken to real people across Britain. Those who have the luxury of time are sitting tight; those who have to move are pressing on — some with a slightly lower price. Here are their stories.
As Britain took in the Brexit result, Helen Oakwater, who is in her fifties, took her three-bedroom detached house in Bushey Heath, Hertfordshire, off the market. “It was not a sensible time to sell,” says the parenting trainer and author of Bubble Wrapped Children (fabparents.co.uk). Despite wraparound views and planning consent to extend to five bedrooms, the midcentury home had only three viewings since it went on sale for £1.1m in the spring. “The agent said it was Brexit uncertainty.” In no rush to sell, she plans to try again next spring.
She is not alone. Three in five agents saw a fall in the number of homes for sale in the week after the vote, says the National Association of Estate Agents. Owners are worried about what their homes are now worth: an online valuation tool launched by Haart estate agency after the result has had more than 11,000 hits.
This uncertainty caused the company directors Mike Gazzard, 67, and his wife, Brenda, 65, to delay downsizing from their six-bedroom house near Guildford, Surrey. “We thought perhaps its value would be less than before the referendum. We’re lucky that there is no desperation,” Brenda says. Meanwhile they can house both their rentysomething children.
Some are cutting prices. Henry Miller, 39, an IT worker, and his wife, Laura, 42, lost their first-time buyer the day after the vote and discounted their four-bedroom semi in Bromley, southeast London, by £35,000 to secure a new sale at £790,000. “We saw a dramatic change in the market,” says Laura, a stay-at-home mum. They want to move to Hampshire before their sons Harry, 3, and Ethan, 2, start school.
But most are forging ahead, says Bee Aspinall, of lifeafterlondon.com, a site that offers advice for those moving out of the capital. “The first few days after Brexit saw some knee-jerk reactions, but we have seen no slowdown in interest in moving out of London since.” Although Andy and Jacqui Butterfield’s three-bedroom cottage in Teddington went on sale for £1.275m the day after the referendum, “two people have loved it”. “For us, nothing has changed,” says Jacqui, 44, who will run holiday lets when they move to Lyme Regis, Dorset, in time for Alexandra, 10, and Harry, 6, to start secondary school.
Halifax’s latest index, published on Friday, showed that although house prices are 8.4% higher than this time last year, they fell by 1% in July. Nationwide, meanwhile, reported growth of 0.5% for the month.
A few sellers are even trying to take advantage, such as Richard Miller, 45, a nickel trader, and his wife, Lisa, 44, who listed their Shropshire grand design with a new agent after the vote, to lure international buyers drawn by the weaker pound (01743 296116, fineandcountry.com). “We’re hoping that may give us an edge,” says Lisa, a recruitment director. They have dropped the price on six-bedroom Netherwood, near Shrewsbury, by 4%, to £1.295m, as they have bought land nearby to build a new home.
“I’ve been really upset by Brexit,” admits Claudia Cronshaw, 33, a leisure PR. Yet she and her husband, Mark, a wine firm director, also 33, bought a four-bedroom house in Colchester, Essex, for £705,000 last month. “We still felt positive about what we were buying. It will always have strong fundamentals.”
Though the odd buyer has pulled out, most are going ahead, says James Mackenzie, head of Strutt & Parker’s £2m-plus country sales. One client, a salesman upsizing in Ascot, Berkshire, withdrew on results day as “he didn’t have a clue what his earnings would be over the next three to four years”. Mackenzie expected more such calls, but instead had two gazumps — one in Cheshire — and two other Cotswold deals agreed near their £3m guide prices.
Nevertheless, surveyors have seen less interest: a net balance of 36% report a fall in new buyer inquiries, says the Royal Institution of Chartered Surveyors: the worst level since 2008.
Investors, meanwhile, are piling in. “Everyone is planning either to carry on as before, or to start taking action to exploit the immediate uncertainty,” says Rob Dix, founder of thepropertyhub.net. Despite Brexit, Dave Walker, 48, a finance director from Preston, Lancashire, is purchasing his 11th buy-to-let, a two-bedroom flat in Liverpool, through Sequre Property Investment. “The northwest is still earmarked for investment,” he says. He also snapped up an off-plan Welsh holiday let in Colwyn Bay, to profit from the expected rise in staycations.
Big players are undeterred, too. “Property that is priced well, sells well,” says Adam Challis, head of residential research at JLL. Since June 23, the group has seen nine bidders vie for a golf course with space for 2,000 homes near Harrogate, North Yorkshire. A subsidiary of the firm bought the Greengate development in Manchester, the largest build-to-rent scheme outside London, for £107m, and funding of £320m and £500m has been agreed for two London towers.
Agent inquiries via aplaceinthesun.com rose 11% month on month after the vote, yet the Leave result has hit some expats hard. Robin Fenton, 70, and his wife Paddy, 68, cut the price on their 13-bedroom house and gîte in the Dordogne, southwest France, by 14% to €570,000 — in line with the new exchange rate — to “keep British buyers in the running” (forgebasse.com/maison.htm).
The pound’s fall also cost Tracie Sharp, 47, and her husband, Mark, 45, from Portsmouth, about £9,000 on their €50,000 purchase of a four-bedroom house in the Limousin. “I have to carry on working for another year and a half in Britain to fund the renovation,” says Tracie, an events manager. “We didn’t think it would affect things as much.”
Some names have been changed. This article appeared in The Sunday Times Home on August 7, 2016.