One local area where the referendum has already had an impact is in property transactions.
Read Justin Sadler’s thoughts on Brexit’s effect on this summer’s property market.
What effect will Brexit have on the property market?
Whether you believe Brexit will take place or not, whether it’s a calamity or a boost to Britain, there is no doubt that we are in for a period of uncertainty in political and economic terms over the next few months, particularly with party leadership battles taking place.
In my view it’s likely that the period of instability we are experiencing will mean that house prices will remain steady but transactions are likely to decrease in number. This is one of the “Blood on the Streets” periods, where Estate Agents may find work a little harder to come by.
From our experience at Barrett and Co, Brexit is causing some people to reconsider purchasing but I would suggest that the economy is not as it was in 2008 during the financial crash and as the Governor of the Bank of England points out, interest rates are likely to go down. The banks are far more prepared with liquidity, the Banks’ ability to lend remains high and mortgage rates remain low.
There may also be some international investors who can take advantage of Sterling’s weakness and buy investment property in Reading.
I do think it’s likely that some sellers will simply withdraw from the market, but there are unlikely to be many forced sellers.
However, where there is uncertainty there is the potential that some buyers may try and take advantage.
Is Gazundering set to return?
With Brexit, we have already seen several deals that had been agreed coming undone and there is plenty of opportunity for gazundering.
Gazundering is the ethically shaky habit of a prospective buyer making an offer on a property which the seller accepts, and then reducing the offer shortly before completion of the sale.
The buyer is counting on the seller being eager to sell and reluctant to have to market their property all over again, (and in many cases incur further costs).
Although there is no evidence yet that Brexit is affecting property prices, the uncertainty alone is enough to make people vulnerable to gazundering.
Whether you are the seller or the buyer in a potential transaction that is now in doubt as a result of Brexit, you will have to be careful to check what you have agreed as you could become liable for the costs of the other party.
It is therefore vitally important that you check your legal position before making any decision.
I would be happy to review your legal position and discuss matters with you in an initial fixed fee meeting for £95 including VAT. This would help your peace of mind and I can also discuss lock-out clauses, which are a good way to prevent any gazundering taking place, (if you are a seller you might want one of these).
Please call me to book an appointment on 0118 958 9711 or email me at [email protected].
Here is a testimonial from a recent client: “In the dawn of ‘Brexit’, we were unsure exactly where we stood regarding our property transaction. It wasn’t a straight forward conveyancing case and we needed to clarify if we were contractually committed and what other options were available. After a fixed fee one hour consultation with Justin from Barrett and Co our position is now clear and we can progress with confidence.”
Paul from Reading
P.S If you are interested in the legal process of Brexit, you might want to read this article which explains why it may be challenged in a Judicial Review: