Reflections on the housing market post Brexit and the Autumn Statement

There is little doubt that the housing market throughout the UK had a bit of a wobble after the June referendum vote but, according to Squab Removals & Storage in Leamington Spa, the nation didn’t hold its breath for long.

In fact, the company believes that as the gloom of uncertainty following Brexit lifts so business has returned to normal for home movers and house builders alike.  It seems that the demand for housing throughout the UK has remained largely unaffected. The nation just coughed – and carried on.  That said, some sellers, fearful that the market would soften, did lower prices to secure sales, so for the first time in a long while there is a buyer’s market in some areas – even if it’s only temporary. There is still a lack of housing in the UK and, until that imbalance is rectified, prices will rise and buyers will struggle.

According to Emlyn Evans, Director at Squab, his company’s figures confirm this trend.  Although the number of moves completed locally by the company remained essential unchanged between July and October, compared with previous years, new enquiries are around 15% down.  “We think this just reflects the uncertainty that followed Brexit,” he said.  “We fully expect enquiries to return to normal fairly quickly.”

That said, first-time buyers, the people who kick-start the chain of moving, are still finding life tough. The number of 95% mortgages fell around Brexit by 3.5% compared with the same period in 2015.

We have, however, just had the Chancellor’s autumn statement which has made some effort, if small, to alleviate the problem. The announcement of £2.3 billion for housing infrastructure might make a significant difference.  With this the government is trying to encourage home builders, who already have planning permission on sites but are not inclined to build because of a lack of infrastructure (roads, shops, schools, etc.), to get on with it.  This would allow them to build real communities, where people will want to live, not just soulless dormitory estates.

There is also a commitment to provide £1.4 billion to deliver an extra 40,000 ‘affordable’ homes. But who, exactly, can ‘afford’ them, is not quite so clear. According to the BBC’s Money Box programme, ‘affordable’ means under £450,000!  And are the other 100,000, by definition, unaffordable? The housing white paper that’s coming out the end of the year will hopefully provide the detail.

That said, some will benefit and, if the houses do get built, people will move into them.  This will not only benefit first-time buyers, but people at the other end of the housing scale too who have not been able to downsize for lack of appropriate property.  If Mr. Hammond helps the aging population he will have freed up larger homes to keep the natural flow of housing, to meet people’s changing lifestyles, moving.

Perhaps more important than the availability of housing, is people’s feeling of wealth.  If they feel wealthy, they are likely to move home and create growth in the economy as a result. If they don’t, they won’t.  The Chancellor announced a number of infrastructure projects including £1 billion for digital infrastructure, £1.1 billion for local transport networks, £220 million to reduce traffic pinch points, and more.  These projects will create wealth, and wealth creates confidence.

Wealth is also created by business and the fall in corporation tax to 17% by 2020, and even as low as 15% if Mrs. May has her way, will be welcome.  Give business people a little more money and they can’t help but employ people – that’s what they do.  And, although the growth figures have been revised down, they are still hovering at around 2% for 2019 and 2020 which, if they are right, are a lot better than the ‘remainers’ were predicting.

Put together – infrastructure, business growth and housing – maybe, just maybe, there will be enough confidence around to help the JAMs (Just About Managings) become TIEs (Taking It Easiers) as Brexit moves from a theory to a reality.


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