A London buying agent has called for a second referendum on Britain’s EU membership, suggesting that it would give more certainty to the housing market.
Caroline Takla, managing partner of buying agency The Collection, says that London’s property market has been hit by a number of factors in recent times including the original Brexit vote almost two and a half years ago, different stamp duty reforms, and the prospect of a possible Labour victory should there be a snap General Election.
Takla says that arguably the only group of potential buyers who were benefitting from the uncertainty were from overseas. However, she says this group is also now sitting on its hands.
“Even foreign buyers are now of the opinion ‘let’s wait and see’. The Brexit negotiations are going extremely badly and we are hurtling towards a no deal, which would hinder the property market significantly” she says.
“Undeniably, the reasons for the property market’s speedy recovery post the 2008 crash was that London was the world’s leading global financial centre and we had access to the world’s largest trading block. With Brexit we have eroded the fundamental pillars to the success of our economy and like it or not, a large part of which is fuelled by the success of revenues taken from property deals” she continues.
Takla then says this begs the question as to whether the public should - in her words - “take back control” and have a final say on the Brexit deal or whether the government should pursue departure from the EU at all.
“If a People’s Vote were granted the period until polling day would undoubtedly be yet another uncertain period for the market, but there would be those brave speculators that would perceive this as green shoots in the market and buy in anticipation of an upturn in fortunes for London property” she believes.
Takla claims that if a second referendum confirmed an exit from the EU, house prices would inevitably drop further, although it would unlikely be at the levels stress-tested by the Bank of England.
“The likelihood is that we would see a dip and then a sustained period of plateau during the transition period. Sterling would dip again and whilst it would certainly be yet another rocky period, there will be always be those looking to take advantage and make a deal. Most importantly, people’s personal finances would be impacted, especially homeowners, with their assets almost certainly losing a chunk of their potential value” she warns.
However, Takla claims that if the vote chose to remain within the EU “the effects of the long period of uncertainty would almost immediately be eradicated.”
She says the UK “would certainly regain its stature as a leading financial powerhouse and investment hotspot” and the lost confidence would begin to be restored.
“With the fog of uncertainty lifted, activity in the property market would undoubtedly surge, which in turn would see movement up and down the ladder. Prices wouldn’t necessarily soar at the top end of the market as we would still have high taxes to contend with, but the certainty would be enough to take the plunge and those that had adopted a wait-and-see attitude would almost certainly find themselves bidding against others competitively, when they would have had a clear run had they acted earlier” she concludes.