EU Uncertainty Putting Property Market Under Strain

EU Uncertainty Putting Property Market Under Strain

The property market is coming under increasing strain as we head towards the EU referendum.

Sales have begun to slow down and if we vote to leave there are dire predictions about plummeting prices and rising interest rates feeding off each other to provide misery for home owners and landlords.

If the economy suffers then landlords will be unable to push up rents to cover their extra costs.

If all this uncertainty is giving you sleepless nights, then don’t despair.

R&T Property Solutions have an answer.

Especially if you are a buy-to-let investor with tenants in your homes.

We are in the business of investing in property over the long-term.

Our HQ is in Glasgow but we are interested in purchasing property anywhere in Scotland.

And because we don’t have nervous shareholders to placate, we can take a more relaxed view of peaks and troughs in the market.

What this boils down to is: if you want to sell your property, we want to hear from you.

We can offer a fast, no-nonsense cash deal. A decision on the value of your property can frequently be made within just 24 hours.

In many cases we can complete the whole transaction within seven working days.

We operate ethically in a way which does not inconvenience your tenants. In fact, we are particularly interested in tenanted property and our code of conduct ensures their rights are protected.

And if you decide to sell to us there will be no broker fees, no estate agents fees and no requirement for Home Reports.

In recent months we have been contacted by increasing numbers of landlords who are keen to get out of the rental business.

And who could blame them?

Scotland’s property market could be hit by a double whammy consisting of a Brexit vote followed by another independence referendum.

It could leave homeowners facing a lengthy period of decreasing values and increasing lending rates.

In a small way, this has already begun to take shape.

Uncertainty over Brexit has already made an impact on the market with estate agents and letting agents talking about a slowdown.

At the same time George Osborne is warning that if we leave the EU prices will fall and interest rates will rise.

One thing markets don’t like is uncertainty.

When investors don’t have a clear idea about what may happen, either politically or economically, in the near future they get the jitters.

Any funds they had previously set aside for medium or long-term projects is swiftly locked up in a safe haven. The lack of investment normally leads to a downturn in the economy as a whole.

And this scenario certainly applies to the property market.

The Chancellor of the Exchequer is fuelling the current uncertainty when he says house prices could fall by 10% and up to 18% if we vote to leave the European Union.

And he’s fanning the flames by warning that a Brexit vote would lead to higher interest rates, making all home loans more expensive.

This is because the banks would want to protect themselves from an increase In defaulters as the economy goes into a nosedive.

To be fair to George Osborne, he is not alone in articulating these dark predictions.

The International Monetary Fund has warned that mortgage interest rates would also rise because of financial market instability. That view is backed by some major financial heavyweights like Deutsche Bank, Virgin Money, Fitch, and Standard & Poor’s.

There is another negative dimension to a Brexit vote.

According to a report, workers from other parts of the EU will no longer be able gain automatic entry into the UK. This could have a significant impact on the private rental sector because these foreign workers are more likely to rent property than purchase it.

So fewer foreigners means lower demand which translates into reductions in rental income.

In Scotland, the situation facing landlords could be worse than for those in the rest of the UK.

The SNP Government has said that a Brexit vote will trigger another Scottish referendum on independence, if the majority of Scots voted to stay within the EU.

It will take some time to organise a new referendum, possibly up to a couple of years.

That means another two years of uncertainty for a market which is already depressed.

It is difficult to imagine a more nightmarish reality if you have invested in property.

Meanwhile, as if to confirm all the pre-vote fears, the Halifax Index shows that prices fell by 0.8% in April.

If you are concerned about how all this uncertainty might affect your portfolio then contact us right away.

R&T Property Solutions want to hear from you whether you are thinking of disposing residential property, tenanted flats, shops or land.

Call us on 0141 636 0521 to speak to one of our professional agents. We will provide you with impartial advice regardless of your situation.