Brexit – the FUD Factor.
It’s probably fair to say that the construction industry has been hit harder than most after the Brexit Referendum. Shares in construction companies – especially those involved in the housing market, have dropped considerably, and house prices have dropped, as well. A 10% drop is quoted for average house prices in London, with the top 25% of the market faring worse.
At this stage in the game, most of this can be put down to the FUD factor (Fear, Uncertainty and Doubt). Coming after a Treasury prediction of an 18% fall in the value of Sterling (Don't like those statistics? I have others), the banks will tighten up, mortgages will become harder to get, jobs will be on the line, companies will move abroad, energy costs will rise, construction will be more expensive, investors will be reluctant to invest, clients will be pulling out of deals and transaction volumes will decrease.
On the other hand, Foreign buyers (US and Asian) with wads of dollars and a reasonable amount of patience will seize the opportunity to grab bargains following the falls in Prices and Sterling. Sharks, of course, always home in on wounded creatures with the prospect of making a killing.
We are in the Phony Brexit war at the moment. Most people have not yet been affected – unless they have booked a holiday abroad – and the FUD factor is generating more in the way of headlines than facts. Will it all be over by Christmas? I don’t think much will change until we see which direction we will be taking , although the rapid election of a new Prime Minister appears to be stabilizing the market already, and we shall be roasting chestnuts by Christmas.
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