Last Thursday’s events will be forever remembered in the UK’s history. Britain’s voters decided to be more independent and the Leave campaign won with 52%. But what will this vote bring for Manchester’s property market?
The Sterling has seen its biggest drop in 31 years, FTSE 100 companies experienced a significant decrease in value and David Cameron announced his resignation as Prime Minister. All this, understandably, leads to growing concerns in the British market.
Britain, however, is already fighting back slowly. So what does all of this mean for Manchester’s recently flourishing property market? Well, let’s see what five property experts had to say.
Stephen Beech, of property development company Beech Holdings, was a strong supporter of the Remain campaign and expressed his fears for the British market:
We’re gutted about the result. When I walked into the office this morning several staff members from both Britain and other countries in Europe were in tears.
While we are disappointed by the result it reassures me that Manchester as a city voted to remain rather than leave. Sadly that wasn’t the case in other areas. But what we need now is strong political leadership.
It may well be an uncertain few months but hopefully it will settle but I still think the property sector here will continue to do well as it has the safest and strongest legal system.
I’ve already held a meeting with all my staff to tell them jobs are safe. Talent is welcome at Beech Holdings and that will continue to be the case. We have a diverse workforce and are proud of that.”
Assetz Property’s Chief Executive Stuart Law highlights that, regardless of any uncertainty, investors have to look ahead rather than back.
Today’s result to leave the EU has only increased the cloud of uncertainty cast over the British property market, but it is not the time to just sit back and watch the events unfold.
Now is the time for buy-to-let investors to turn their attention away from the Capital, which could experience difficult times ahead in terms of economic and currency uncertainty.
Cash rich investors should instead look to the Northern Powerhouse, which still remains a strong contender for those seeking to protect capital and produce an income well above bank interest rates.”
Daniel Gandesha, Founder and CEO at Property Partner, thinks it’s important to focus on the underlying factors: an imbalance between supply and demand, housing resilience and interest rates remaining low.
Britain simply doesn’t have enough homes. Supply is constrained by things like planning rules, lack of public investment, skills shortages, even the availability of raw materials. Demand is further boosted by domestic population growth and the low cost of borrowing.
This simple disconnect between supply and demand has driven prices and will continue to provide upwards pressure over the medium to long term.
With UK households heavily burdened by debt, any increase in interest rates would put further pressure on the economy. Many believe that Brexit could even place downwards pressure on interest rates, and economists at JP Morgan have forecast borrowing costs could fall to zero by August.
So, while “Leave” has won the day, we believe that for the UK housing market the watchword is “Remain”. It is going to seem like a helter-skelter for all markets for the next few months, but the medium and long-term prospects for UK residential property remain strong. In the end, people need somewhere to live.”
Ian Waxman from Pad Residential supports this optimism. He thinks Manchester’s housing market will come through with the goods, despite any short-term uncertainty.
This will affect everyone but the housing market will continue to attract international buyers. Investment in property is here to stay. I must say if the Government was prepared for his result there would have been a clearer plan B.
The situation will muddle along and will cause damage until Plan B is formulated but housing will adapt to market forces.”
And finally, Frazer Fearnhead, CEO of The House Crowd, is another supporter of the previous statements, showing a positive mental attitude.
The truth is, no one really knows what’s going to happen to the property market following Brexit.
What we do know is that Manchester’s residential housing market has climbed from strength to strength in recent years. The city sits at the heart of the Northern Powerhouse and is in receipt of ongoing investment in infrastructure.
The uncertainty surrounding Brexit may cause a brief slowdown in rising house prices and foreign investment, but bricks and mortar is likely to remain a sound investment.
Predicted house price growth in Manchester for 2016-20 stands at 24.6% and rental income for the period is expected to rise by 22.8%.”