Property Transactions likely to slowdown.
The outlook for the UK property market according to certain analysts is looking somewhat unpredictable at present, mainly due to the uncertainty surrounding the EU referendum vote set for 23rd June.
Most recent polls give the “Remain” a lead over the “Leave”, however it is close and with a fair number of undecided voters it could still go either way, making a ‘Brexit” a real possibility, the immediate effect to that no one can really know, however as markets do not like indecision we may see a slowdown in activity from anytime now.
The Bank of England is consumed with preparing contingency plans for Britain to leave the EU, according to the FT in the days leading up to the June 23 poll, the Bank will hold additional auctions of sterling to ensure the banking system has sufficient funds to operate in a potentially chaotic moment.
George Osborne has suggested interest rates will rise if the pound slumps, bringing a bout of inflation and making households worse off.
Estate Agents could see falling transaction volumes over the next couple of months and this could be very bad news for the new style hybrid online agents like Purplebricks who are still heavily committed to advertsing costs and who are depending heavily on sales growth to enable them to move into profitability, which the company has forcast for next year.
Traditional High street agents are accustomed to such fluctuations in the property market, they will adapt to conditions as they have always done, however this will probably be the first test for the hybrid online agent as to how they will adapt in a slowdown.