Conveyancing Association react to EU Referendum vote

Eddie Goldsmith, Chairman of the Conveyancing Association, said:

“At the June meeting of the Conveyancing Association there was overwhelming support to remain in the EU. This was based on the need for stability in the economy which feeds through to the housing market. Borrowers who are looking to make the biggest financial decision of their lives want to see and feel that nothing is likely to risk their jobs or increase their mortgage payments .

“A Vote for Leave unfortunately creates that type of uncertainty because the eventual result of the negotiations, and the UK’s economic position in this new world, are (at the moment) unknowable. There is therefore likely to be a period of nervousness in the housing/mortgage markets which could last for a number of months – for instance, we could see a reduction in housing transaction numbers until consumers/borrowers are more certain of what the position is.

“However, once this has settled down, I anticipate the market picking up again later in the year. People will still need to move, lenders will still need to lend and with mortgage pricing remaining highly competitive this could actually prove to be a good buyer’s market. With the ball being in the buyer’s court we may well see some hard negotiation on prices resulting in a short-term fall. In terms of Bank Base Rate I suspect it will stay the same for the immediate future however the Bank of England MPC does have the option to cut it further later in the year should it feel the need to stimulate the economy.

“As always the housing market across the UK is different, region to region. The London market, for instance, may well gain a significant short-term boost because of the weak pound although I suspect foreign investors will also want to wait to see how the market plays out. Across the rest of the country it is difficult to predict how the market will change but it will undoubtedly have to adapt.

“In all there is likely to be a little short-term pain because of increased uncertainty – the extent of this is however dependent on any number of variables. What we should however guard against is media sensationalism creating widespread panic which effectively talks us into another recession; instead, with the vote being what it is, the powers that be have to bring as much stability and certainty to the overall economy and the markets as possible to make sure the predictions of doom do not come to fruition.”