UK property market got result it wanted
Posted on Dec 16, 2019 | in Blog
The UK property market got the result it wanted. Translate: Boris got a thumping majority and Jeremy Corbyn and John McDonnell are back off to college to resit their GCSE Marxism exam at a private college in Islington — for the 19th time.
Over the weekend, understandably, the property and money sections have been alive with speculation as to how bricks and mortar will respond now that Brexit will finally be delivered and the spectre of communism has gone firmly up in smoke.
In all honesty, they didn’t need to. All they really had to do was point their readers towards the barnstorming performance of the Pound. Within seconds of the exit poll result being delivered, Sterling had shot up to a pre-EU Referendum result high against the Euro.
More importantly still, most on the trading floor are predicting that the gains will not be short-lived but will become the new norm, against both the Euro and the Dollar. Some even claim the Pound could hit $1.40, which would be quite some feat.
More than any other market, the currency markets are driven by sentiment and the sentiment surrounding the UK right now is extremely positive. Brexit may bring uncertainty, but at least there is clarity on our direction. Certainty amid the uncertainty if you like.
The sentiment around the strong numerical victory was further strengthened by the symbolic shift of huge chunks of the north from red to blue in order to get the Brexit they had voted for three years previously. It shows the country believes in itself whatever lies ahead.
As for the property market, both residential and commercial, the extent of the Conservative victory could see transaction levels really pick up in 2020. This was no ordinary win and the country will enter the new decade on a high.
There is a huge amount of pent-up demand out there that will be unleashed on the market during the first quarter of 2020 and throughout the rest of the year. The expectation is that people and businesses who have put their lives on hold will now put the pedal to the floor.
As a result, price growth in 2020 is likely to be a lot more robust than in recent years, when the market has been in a protracted rut. This is good news, of course, but what we don’t want is for values to suddenly get ahead of themselves and to rise to unsustainable highs.
After all, we aren’t out of the woods quite yet. All eyes will now be on how the economy holds up as trade negotiations take place and we formally exit the EU. In that sense, the real business of Brexit is really only beginning.
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