One of London’s leading estate agents says Brexit has had at worst a neutral effect on the housing market and may in fact have helped it - with the real villains being stamp duty and former Chancellor George Osborne.
Trevor Abrahmsohn - who is the founder of OnTheMarket and who runs high end north London agency Glentree Estates - says in his company blog that his agency has sold £371m of homes in the past 18 months “and 50 per cent of it is directly associated with our devalued currency.”
Sterling’s value against other major currencies has dropped between 10 and 20 per cent since the EU Referendum, and Abrahmsohn says that if there were a ‘no deal’ exit from the European Union next year - which he personally doubts will happen - it would nonetheless leasd to a further fall for the Pound, possibly to something like parity with the Euro or the Dollar.
This would “render inward investment even cheaper for international purchasers of UK property” he says.
“With all the ‘hoo ha’ surrounding Brexit, it either has a zero effect on sentiments or a positive one, but certainly not a negative one” insists Abrahmsohn.
Instead, the agent puts the blame for any housing market problems today firmly on the former Chancellor George Osborne and the tax changes introduced during his time in office.
“We may have lost a few international bankers due to the uncertainty of the financial services sector ... but the changes to Non Dom fiscal rules are the real culprit here” says Abrahmsohn. He believes such bankers are victims of “the existing draconian residency arrangements imposed by the former Chancellor Osborne.”
Worse still, he says, is the stamp duty changes introduced by Osborne in late 2014.
“Buyers in excess of £1m are staring at an unaffordable and un-mortgageable wall of costs and some are choosing not to embark on the journey at all. You can’t blame them” he claims.
Osborne’s stamp duty reforms have recently been the subject of criticism from a number of sources.
This follows the revelation that some £1.987 billion was raised from stamp duty the second quarter of this year from receipts in England and Wales: as recently as the the third quarter of 2015 - that is, six months before the introduction of the three per cent stamp duty surcharge for additional homes, also initiated by Osborne - revenue from SDLT was £1.999 billion.
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Mr Abrahmsohn is absolutely correct.
And the other aspect of this madness is the SDLT reciepts fell as a consequence of the changes.
Time we'd an Estate Agent or two in Government.
Sure, stamp duty is a problem, but to think that Brexit is not having a negative effect has got to be wrong - the political and economic uncertainty alone is making people stay put until the dust has settled.
There are lots of property coming to market, its the sellers who want high prices that are causing the problems. Share prices go up and down people except this, but when property prices drop sellers wont except this.
Saying that a further reduction in the value of the pound would automatically encourage more investment from foreign purchasers is like the Brexiteers who said that the EU would be bound to come to a good deal because of the loss of economic benefit to themselves. The latter completely ignored the fact that the European ideal takes precedence over economics for most EU members. In the latter case here, Mr Abrahmsohn completely ignores the fact that the UK's loss of stature which will have an equally adverse effect through a loss of confidence in us. Brexit is more than pounds, euros and pence.
The vast majority of the population would disagree 100% with Mr Abrahmsohn on 'non dom' tax arrangements. I certainly do. I hope we get rid of 'non dom' status altogther. It is an affront to natural justice and the unforunate people like me who happen to be born in the UK that some people - often for totally spurious reasons - are able to live and work in the UK for many years and not pay their share of tax. I am sure Mr Corbyn will end it completely when he gets into Number Ten, and not before time!
Hey cut him some slack, he is only reporting on what he is experiencing in his business. It may not fit what you think is going on out there but, in central London, we are all seeing what Trevor Abrahamsohn is describing. Stamp Duty is sighted daily as a reason for not offering or transacting, Brexit is very rarely raised as a concern and usually only by sellers asking whether they should wait until after Brexit to sell.
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