Life After Brexit….3 Months Later
I thought I’d take a deep breath now that we’re three months into our post Brexit economy (yes its three months already!) and have look at what has happened to the property market since the vote and now we have a couple of months of date we can now start to judge more accurately the impact of the referendum. Well for sure in the few weeks after Brexit the market slowed but all indicators are that it is now back to its normal cycle and its normal behaviour. One indicator I look at is the house price sentiment index which normally runs at about 70. Now I don’t know how it’s calculated (by HIS Markit, the financial data provider), but I do know the higher the better, and if for instance it drops below 50 then the public expectation – or sentiment – is that house prices will drop. Well in July just after the Brexit vote, that index fell to 51.3, which is extraordinary – so it got close to the 50 level but didn’t quite get there – so it suggests that even then people didn’t really believe that house prices would drop! And of course since then it went to 58.3 in August and 64.7 in September, so very close to its normal running average. In addition we now have the figures showing that house prices have actually moved up over the last three months – September figures are looking around the 1% mark – and that transaction volumes are normal for September. It just proves that take A RIDE works – the big issues driving property prices are supply and demand and employment and so on – and they didn’t change as a result of Brexit – there was a momentary blip of fear from some parts of the populace but it wasn’t huge and it didn’t last long. In fact looking at 2016 in retrospect and in conjunction with every other year, the mid summer slight hesitation and dip looks exactly as it does every year – so there’s no real evidence it was affected by Brexit at all!
Phew! So we are now confident that we can all go back to normal! Happy investing all.