Love it or hate it we are now destined to leave the European Union.
Personally I consider this to be a reckless move and one which will impact on the lives of not only those close to retirement like myself but also our children and grandchildren. There is much talk of democracy and of how the people have spoken and made their voice known.
I do get that but if every major decision in the governing of our country was left to the lottery of a referendum I am not sure we would still be living in a democracy. The risk of anarchy through ill-informed and disconnected decision making would be heightened. Isn’t this why we elect people to Parliament to take these major decisions on our behalf? Surely when the leader (former) of the Government (which the majority of the country voted in) is saying its best to stay in Europe and the people decide its best to leave, does this not in itself undermine the whole democratic process and the sovereignty of Parliament?
Notwithstanding some tricky and so far unanswered constitutional questions, the fact is we are leaving and as I have been told so many times recently – I need to accept it and get on with planning my business accordingly.
Even though I initially pushed back when being told this, the fact is, it is when looking at the situation rationally, good advice. The time for moping and reflecting on what might have been should be viewed as over. As business people we need to look at this as yet another hurdle in life and one which needs a strategy to make sure we are able to survive, continue to grow and more importantly preserve jobs of those who work for us.
So what’s going to happen to the property market? Who knows! Not even the experts are able to speculate on what might and might not happen. So what do we know for certain? The pound is weak and continues to fall in the currency market. The Stock Exchange is experiencing sever fluctuations in prices. The Country has been stripped of its AAA credit rating. The Government is split on Brexit and the Prime Minister ducking his responsibilities to the Country has decided to resign. The opposition is not effective and is in melt down. The long period of stability and certainty stemming from a severe recession has vanished overnight. Clearly given all of this you don’t need to be an economist to know that we are now facing a financial crisis which will inevitably impact on consumer confidence.
As a consumer looking to buy or sale a property there is no longer any short to medium term certainty that interest rates will not increase, property values will not fall and job security will prevail. Not knowing what will happen in this respect will clearly cause the property market to stall. For how long who knows but most economists are looking at a 25% fall in transaction numbers over the next 12 months.
So what do we do? Bury our heads in the sand or as I say look to form and implement a strategy? The conveyancing market will contract this is inevitable so as a business there is a need to make sure a larger share of the market is secured. This can only be achieved through reducing prices and looking to reduce outgoings. Regrettably this could lead in some places to job losses.
The only upside to all of this is that the cost of borrowing could become cheaper and with property prices in some parts of the country falling this could stimulate some activity. Those who have job security may be well placed to make a move in the property market to grab a ‘bargain’ with low cost borrowing. As a seller or buyer or both this may very well be the time to enter or re-enter the property ladder.
Furthermore, the property market in London is unlikely to be impacted due to demand outstripping supply. The fall in the pound is also likely to attract more foreign investors looking for long term investment in property.
Those who supported our departure from Europe played down the impact of Brexit and in my view misled voters on the recessionary consequences which are inevitable when as is the case the Country is currently operating in a state of uncertainty.
David Pett Solicitor
The views expressed herein are the personal views of the writer.