Extended Brexit negotiations could spark 20% dip in transactions: haart

Although the current property market is remaining reslilient to Brexit uncertainty, with transactions increasing by 9.7% annually, Smith believes "the greatest threat is a delay to Brexit because of political posturing".

He explained: “Whilst a ‘no deal’ scenario would potentially be quite damaging, an extended period of Brexit negotiations beyond the set date of March 2019 could prove just as detrimental.

"Extending negotiations would only encourage further uncertainty, resulting in a delay among buyers and sellers. Should this continue throughout 2019, we could expect transaction volumes to dip by as much as 20%, further stunting any opportunity of economic prosperity at a time when we need it most.”

Smith believes that 'no deal' would result in a "short term blow" for the property market but doesn't foresee a large-scale property market crash. He instead anticipates that in this scenario house prices are "unlikely to fall by more than 5% due to a shortage of homes on the market propping up overall prices".

A challenge to Theresa May’s leadership, he added, would also "risk creating further uncertainty in the market" and Smith says in this instance "we’d undoubtedly see more homeowners holding off listing their homes, resulting in a drop in transactions of roughly 2% and potentially house price dips".

Conversely, Smith believes that if the UK leaves with a good deal, "we could expect a super-charged property market in 2019". If a positive deal is reached, he expects an uplift in transactions of 10% to take place in the second half of 2019, with an increase in buyer demand leading to slight price rises thereafter.

Paul Smith concluded: “Twenty-nine months after committing to leave the EU we finally have a Brexit deal on the table, however political infighting is at its highest level and a number of scenarios could play out which would affect the property market in different ways. Government data shows that while total transactions have risen by 53% since 2009, over the last four years, they have largely remained stable, sitting at around 1.1m annually despite the referendum being called in 2016.

“I believe that even if we encountered a hard Brexit, we would be very unlikely to see the significant price falls encountered during the credit crunch. Greater regulation in the banking and mortgage market, a shortage of supply and Government support which underpins the first time buyer market means that a far more likely outcome would be a reduction in transaction volumes. While this uncertainty would result in fewer homes coming to market, demand will continue to outstrip supply as at the end of the day people will always need to move home for various reasons, which will ensure that prices continue to hold-up regardless of the outcome."