Why has Brexit sparked a mini boom in the housing market?
onsumers have reacted with understandable caution as the country’s nightmare of a government presses ahead with its plans to drive us all off a cliff, so how come the housing market is in the midst of a mini-boom?
Britons have become wary of indulging in big ticket purchases with Brexit looming, cars being an obvious example. Earlier this month the Society of Motor Manufacturers & Traders reported a 4.1 per cent fall in new registrations, the fifth consecutive monthly decline.
It isn’t hard to see why: landing oneself with a substantial financial commitment at a time when there’s a disturbingly high risk of the roof falling in is a very bad idea.
However, the housing market is moving in the opposite direction. The latest figures released by property website Rightmove are striking: they show a 6.1 per cent rise in sales agreed between July 7 and August 10, with all regions showing improvement when compared to the same period a year ago. The traditional holiday spell hasn’t been this busy in four years.
Given consumers’ general prudence in the face of the uncertainty created by Boris Johnson and his chums, this seems counter-intuitive. A house is the biggest financial commitment one can make and the consequences of failing to meet the repayments can be dire.
Yet, prudence may be what’s driving this just as it is the motor market’s slump.
The process a homebuyer has to go through before getting a new set of keys is both tortuous and stressful.
It can take months between agreeing a price and actually making a move and a disturbingly large number of people are finding themselves stuck in the housing market mud.
Rightmove notes that the number of properties sold subject to contract but mired in legal process log-jams is at its highest level since June 2014. It currently takes an average of about 105 days between having an offer accepted and moving into your des res.
A chaotic crash out of the EU is going to screw just about everything up. Just take a look at the leak of details of the government’s no-deal Operation Yellowhammer. It’s farcical to believe Johnson’s band of incompetents can have us ready for a no-deal exit in time, however many billions they spaff up the wall in the process (to quote the man).
Small wonder, then, that buyers have decided that now is a good time to strike, despite the relative inconvenience of getting the process moving in the holiday season.
If you are in a position of needing to move for whatever reason, it would pay dividends to get everything done by 31 October. Even those with a little more flexibility who’ve been sitting on their hands may have decided to accelerate their decision making rather than risk adding truck fulls of Brexit mud to the housing market’s ready supply of the stuff.
That market has traditionally enjoyed an autumn bounce. Boris Johnson’s Brexit has, it seems, brought that forward a little. Perhaps we should refer to it as a Boris bounce?
Britons, motivated by the staggeringly reckless the behaviour of the man currently residing in Number 10 Downing Street, not to mention the depressing band of people he has surrounded himself with, are racing ahead in an attempt to find some certainty in a country that is increasingly losing its marbles. Who’d blame them?