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TODAY'S OTHER NEWS

Those dire Brexit housing market warnings - were they just 'Brexcuses'?

An equities analyst has suggested that some of the most extreme warnings of housing market chaos after a Brexit vote came from property industry directors who after the result was known were then seen “rushing to buy their own shares.” 

Writing in Property Week, analyst Alastair Stewart says many of the dire warnings were simply over-baked. 

He says Foxtons’ profits warning shortly after the referendum that “the upturn we were expecting in the second half is now no longer likely to materialise” would actually have been difficult to foretell so rapidly. 

“But reading between the lines, it looks as though lower-than-expected volumes in the first half rather than indistinct prospects for the rest of 2016 and beyond were behind the warning. Expect quite a few more profit warnings from players featuring a rich assortment of ‘Brexcuses’” writes Stewart.

More generally, he writes: “One of the many ironies following the Brexit vote was the wave of directors who had previously warned of the resultant pestilence, war and recession rushing to buy their own shares through corporate ‘buybacks’ or ‘PA’ (personal account).”

He says that Brexit has clearly damaged consumer confidence but that this has been worsened by the general malaise gripping both main political parties. “With that and economic volatility, many would-be ‘mainstream’ housebuyers may well sit on their hands” he says.

But he says this may not last long, and has sceptically commented on housebuilders who “have spared no time getting their bids in” with calls for more government incentives for buyers of new-build properties. 

Instead, Stewart says many of the complaints are merely ‘Brexcuses’ for wider problems especially in what he believes is a heavily over-supplied London market.

“Brexit is merely likely to be the straw that breaks the camel’s back. This highly speculative bubble - which has resulted in 62,490 units coming out of the ground in the capital, according to Molior London - has produced mainly two-bed flats for overseas investors in a dozen or so hot spots” he says.

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