News

News | Published December 13 2018

ORBS Electrical and Warren & Co give thoughts on Brexit as RICS predict housing market to suffer from uncertainty 

A new report from the Royal Institution of Chartered Surveyors has predicted that the UK housing market will suffer from uncertainty surrounding Brexit well into 2019. The report states that the both house prices, and the number of homes being sold, will fall over the next quarter. On average, a home now takes four months to be sold, the longest period since records began in 2016. In response to new Brexit developments, ORBS Electrical and Warren & Co offer their views on what should happen going forward.

The RICS believes this is down to a dual cause of fewer people being interested in moving, and fewer people being interested in selling.

The chief economist of the Royal Institution for Chartered Surveyors, Simon Rubinsohn, stated that: “It is evident from the feedback to the latest RICS survey that the ongoing uncertainties surrounding how the Brexit process plays out is taking its toll on the housing market.” He added that “Indeed, I can't recall a previous survey when a single issue has been highlighted by quite so many contributors."

Key Facts
  • RICS predict housing market will suffer well into 2019
  • House prices and the number of homes sold will go down 
  • A home now takes an average of four months to sell: the longest period since records began

The report also raised concerns that the rate of new homes being constructed could also decrease, largely due to the uncertain economic climate that Brexit has caused. Mr Rubinsohn argued that “The bigger risk is that this now spills over into development plans making it even harder to secure the uplift in the building pipeline to address the housing crisis."

 

Indeed, I can't recall a previous survey when a single issue has been highlighted by quite so many contributors."

These negative forecasts have been corroborated by Mark Carney, the governor of the Bank of England. In a statement last month, he predicted that house prices could fall by up to 30 per cent if a “disorderly” Brexit occurs. This is likely to mean a no deal scenario.

The Parliamentary Review has conducted its own survey of attitudes of prominent representatives toward Brexit. Both Warren & Co and ORBS Electrical work in the housing market and thus would be directly affected by this downturn. Warren & Co provide mortgage advice and were quick to highlight the negative effects of the uncertainty that surrounded Brexit. They argued that: “The biggest effect on my business and the markets is uncertainty.”

They also detailed the concerns off their clients, generally relating to fluctuating house prices, and drew a direct link between these worries and future market stagnations, stating that “With these concerns, people won’t commit to buying a new house or putting theirs on the market which slows the purchase market down.” They also underlined issues surrounding new build construction, specifically the lack of skilled labour to complete these projects. In response to this, Warren & Co called for “clarity” that would attract “skilled immigrants.”

ORBS Electrical focused instead on the need to preserve European supply chains in order to protect the health of the housing market. Owner and managing director Clive Pinnick wrote that: “The main impact for construction could be the inability to make trade deals outside the EU but I think this is unlikely to have a direct impact on a business of our size. Many of our suppliers are based in the EU so we are keen to maintain close trading ties.