Although Brexit is hogging the headlines, it has nothing to do with low property transactions.
The claim has come from buying agent James Greenwood, of Stacks Property Search, who said: “The main factors that are restricting the market are, in order: fear, Stamp Duty, lack of mortgage availability, the forthcoming General Election which provides an excuse not to buy or sell, and reluctance to go through the lengthy and expensive process.”
Greenwood said that the fear factor was a constant, because there is always trepidation attached to buying and selling property. People ask themselves if they are making the right decision and question what would happen if, for example, they lost their job or house prices went down.
He said that fear could be exacerbated by events such as elections and referendums, but added: “It’s rare that a year goes by without an event such as this or the promise of one in the near future. There was a General Election in 2015, the Referendum in 2016, and another General Election coming up.
“Our view is that these events are more of an excuse not to do something than a significant element of the risk analysis.”
Citing Stamp Duty, Greenwood said that if it reverted to pre-2014 levels, transactions about £1m would double. This effect would rippled down through the market, boosting activity at all levels.
Greenwood also said that lack of mortgage availability has become a serious problem: “Around 25% of home owners can’t move because if they were re-certified using new affordability criteria, they wouldn’t qualify for a mortgage of the size they currently have. Furthermore, it’s estimated that 5% of borrowers have a self-certified mortgage and are now ‘mortgage prisoners’.”
Greenwood said that reluctance to move is becoming entrenched. He said: “Selling and buying is hugely time consuming, expensive and potentially disappointing. At best, moving promises stress and upheaval. Understandably, home owners will seek out reasons not to move.”
He added: “Brexit is a factor in ‘fear’ and ‘excuses’, but beyond that it’s not significant.”