House purchases on ice as consumer confidence plummets
After the shocking result of the Brexit referendum, consumers are applying the brakes to all non-essential purchases – including homes – as uncertainty spreads across the country.
In the last ten days, there have been many developments related to the UK’s decision to leave the EU, as it becomes clear that those heading up the ‘Leave’ campaign did not expect to win – and as a result do not have a clear plan for the future. The last week alone has seen Boris Johnson withdraw from the race to be the next PM, prompting many to believe his involvement in the campaign was simply a ruse to gain support from Eurosceptics – and which ended up backfiring significantly. Meanwhile, Nigel Farage has stepped down as the leader of UKIP.
As Westminster continues to be preoccupied by in-party conflicts over leadership and whether or not Article 50 should be triggered, consumers around the country are putting large expenditures on hold until the future is a little clearer.
From holidays and furniture to house purchases, the economy is seeing an immediate slump following the vote – though whether or not this is simply a short-term or long-term effect is uncertain. What is certain, however, is that UK house sellers are being offered prices up to 15% below market value, as buyers attempt to capitalise on the ambiguity of the country’s future. For those looking for a fast house sale, this is not good news, as the situation could possibly get worse over the next six months – forcing vendors to accept offers that negate any profit they hoped to gain.
Surprisingly, mortgage rates are still at a record low, offering great deals for those looking to buy, but clearly the risk of losing value and falling into negative equity is too great versus the possible reward. As a result, many house buying experts are re-evaluating their views on the market leading up to 2017.
“We have had a couple of people saying they’re going to take their houses off the market and wait now,” said Charles Perdios, owner of Anthony Pepe Estate Agents in London.
“We have negotiated a few down. We are expecting 20% fewer transactions in the second half of the year than we expected before.”
So is it all doom and gloom? Not necessarily. Michael Robson, CEO of Andrews Property Group believes any fall in sales will merely register as a blip in the long-term, and that the market will recover fairly easily. He said: “Even for those further up the ladder, any potential temporary loss to the value of a property is only a paper loss and one that only impacts once it comes to selling and, when you consider that you’re likely to be moving up the ladder, the property you purchase will have dropped in value too – quite possibly by more than the one you’re selling.”
Despite consumer confidence hitting new lows, it is important to remember that it is still easy to sell your house fast simply by using a we buy any house company who will purchase any house for cash at competitive prices in spite of market fears.
In need of a fast house sale? Why not ask National Homebuyers for advice, as we buy any house. Call 08000 443 911 or request a call back to find out how much you could get for your property.