How will a no-deal Brexit affect the property market?Adobe Stock
The two and a half years of Brexit twists, turns and wrangling is reaching a feverish climax this week with today’s ‘meaningful vote’. But there are many who believe that the Prime Minister’s proposals may fail to pass. This turn of events would leave two options on the table: firstly, that Brexit won’t happen at all, and secondly, that a no-deal Brexit will come to pass, perhaps by default.
Should the latter become relevant, where would that leave the property market, and perhaps more to the point, what can industry players do to mitigate the anticipated economic fallout of a ‘no-deal’?
- Capitalise on the type of demand
Despite claims from Bank of England governor Mark Carney that a no-deal Brexit could see house prices plummet by 35%, there’s good evidence to suggest that a no-deal won’t necessarily bring about a dip in the housing market.
BNP Paribas Real Estate recently forecast that house prices would jump by 30.4 per cent across Britain to reach £260,000 in the next four years, “buoyed by robust economic growth and the chronic undersupply of new homes”. House price rises are being fuelled, both by a deficiency of new homes, and also by a scarcity of existing flats and houses being put up for sale.
Buyer incentives will also remain roughly constant, even in the event of a no-deal. There are many reasons people move: approximately a quarter of those moving to a new house do so for work-related reasons (whether for a change of job or to be nearer to their place of work). Another 21% move due to needing more space for a growing family or being closer to family. So whatever incentives people might have for moving, none of these are going to change in any significant way because life, and all that it implies, still goes on with or without Brexit.
Estate agents’ marketing strategies should capitalise on this type of demand. Use your customer database to launch targeted campaigns at segmented buyers who fit key profiles. Focus messaging on informing potential buyers about key locations and amenities in the surrounding area and highlight home features that are key for families looking to upsize. For commuters, provide relevant information on schools and public transportation.
- Become a trusted advisor
Knowledge is power. Particularly during times of uncertainty, an effective agent needs to do much more than have an understanding of the needs of buyers and sellers; they need to have their finger on the pulse of a constantly evolving property market. Estate agents that keep abreast of trends and events in the economy and the effects these have on the property market will be better equipped to address the concerns of anxious home buyers, enabling them to feel confident about their purchasing or selling decisions.
Agents who stay up to date with general market trends highlighted in monthly and quarterly key industry reports will already have a deeper understanding of the market which proves especially useful in times of crisis. But over and above this, the easiest and best way to gain insight is to benchmark internal or in-house data against the market.
Big data provides estate agents with access to more information about the housing market than ever before. It enables them to understand exactly what buyers are looking for, the nuances of the wider market, and the realisation that trends can be very cyclical – in particular, that not all decreases are cause for crisis mode.
Those agencies who overlay industry knowledge with their own data to unearth key performance trends that are both unique to their customers and their region – such as pricing strategies, buyer interests, areas where a sales chain is weakest – will be able to tailor sales campaigns and establish a trusted advisor relationship that should last long after a successful transaction.
- Bolster efficiency and collaboration through digital innovation
Businesses in the property sector are constantly innovating and embracing new technologies to improve their offering to customers. Especially now that a no-deal Brexit is on the cards, it’s important that industry players don’t get left behind.
Sensible use of technology can transform disorderly and cumbersome workflows into something collaborative, intuitive, and efficient. This will not only offer longer-term improvements but will ensure that operations are robust and efficient enough to withstand the kind of adversity that no-deal may bring.
Make full use of your existing technology portfolio and maximise support with increased automation. Implement segmented emails, out of hours responses, task alerts, and workflow automation to ensure all elements of a sales chain are monitored and actioned.
Bring your offices together through integrated software and database solutions. Centralise resources and create shared centres for functions like admin, accounting, and marketing to avoid duplication of resources. Support this centralisation with changes to company culture and emphasise closer collaboration.
Guarding estate agents against a no-deal scenario
Several outcomes are possible today for the Prime Minister, her party and the country. The result, and the scale of it, will trigger one or several of a series of outcomes.
But if there is one thing that the various crises in the past century have taught us, it’s that the UK property market is robust and has the means to endure through extremely difficult times. By capitalising on demand, effectively leveraging data, and ensuring operational efficiency, estate agents can weather short term adversity to ensure continued, steady growth over the longer term, regardless of economic circumstances.