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Peter Izard, Business Development Manager, Investec Private Banking


Since the EU Referendum, do you feel there have been developments in the property market which could be attributable to the vote to leave?

The truth is that as far as Brexit’s impact on the property market is concerned, we’re currently in what could best be described as the ‘phoney war’.

There has been lots of talk, speculation and conjecture but apart from triggering article 50, nothing tangible has actually happened yet. What’s more, very little will actually happen to affect the housing market until the negotiations are nearing their conclusion and we start to see what life in a post-Brexit world will actually be like.

Will Brexit help or hinder housing? I can tell you with absolute certainty that no one knows the answer to that question. It’s pure speculation and supposition at this stage which, I suggest, is not terribly helpful to anyone.

At the moment the state of the economy, interest rates, inflation and consumer confidence are all exerting a more direct (and measurable) influence on the market. The good news is that the economy is fairing pretty well, with growth forecasts having recently been revised upwards by the Office for Budget responsibility, from 1.4% to 2% for this year.

The Office for National Statistics has also confirmed that unemployment is at its lowest level since 1975, with the unemployment rate at 4.7%. Interest rates have also been kept on hold, but with inflation now above 2% it will be interesting to see if the MPC becomes more inclined to raise rates in the future?

These more direct influences will, I suggest, have a bigger impact on the property market in the immediate future, than will speculation about Brexit.    

With Article 50 set to be triggered at the end of March, how do you think the mortgage sector will cope with the inevitable uncertainty arising from two years of negotiations? What would be the ideal situation for the market at the end of the negotiations?

I think the mortgage sector will carry on regardless – it has a pretty good track record of being able to weather storms! The media loves uncertainty and so do politicians, but as far as home-owning consumers are concerned, I suspect most are becoming weary of listening to what amounts to no more than opinion being expressed about Brexit.

Are homeowners any more uncertain today about buying or moving house, because of Brexit? I don’t think so. More importantly, I don’t believe there’s any evidence that suggests they are becoming increasingly uncertain.

CML data shows that gross mortgage lending was £18.2bn in Feb this year, which is about the same as Feb last year. Halifax house price data shows that UK house prices in Feb this year were 5.1% higher than the same period a year ago. Given all that’s happening at the moment, I believe that’s a reasonable outcome. The market is still plagued by undersupply and over demand and I believe those factors will have more impact on the market over the next couple of years, than Brexit will.

It’s also worth bearing in mind that factors such as a weaker pound are driving greater interest amongst foreign investors. London property still remains an attractive proposition and I don’t see that situation changing in the near future.

I suggest that the best outcome for the mortgage market in a couple of year’s time would be ‘steady as she goes’ with no great surprises or shocks.

Are there any changes which you would you like to see implemented to boost the housing market, which will be possible as a result of being outside of the EU in 2019?

All markets, the mortgage market included, usually perform at their best when they are operating against a backdrop of stability and certainty. As the Brexit negotiations reach their conclusion, so uncertainty is inevitably going to increase, and all markets should be prepared for a period of turbulence.

My expectation is that as far as the mortgage market is concerned any turbulence should be short-lived and I don’t expect it to have either a significant or long-lasting effect.

The UK mortgage market already complies with the European Mortgage Credit Directive and that’s unlikely to change as a result of Brexit. I can’t see any point in unwinding regulations simply because we’re no longer a member of the EU club. To do so would simply involve more cost, more administration and more time that could be better spent helping homebuyers.

The most beneficial change would be a period of no changes at all! The mortgage market has gone through a lot of upheaval in recent years and I’m sure lenders, brokers and borrowers would all welcome a period of stability and certainty.