Property companies in the residential market are adjusting to the shift in sentiment as buyers and funders put plans on hold.
Alexander Clarke, founder of Altrincham-based SME developer Quinta Group, said private equity backers, the company’s main source of funding, are now not willing to lend “at least for the next six months”.
“They’re hopeful that the economy stabilises and that maybe they’ll be back in the market in the next 12 months. With a lack of funding from the private equity arena, this means that we’ll now have to pursue finance from a mainstream lender, and the process will be much harder.”
However, others were seeing more positive indicators. Georgina Livesey, director of PJ Livesey, the family-owned housebuilder, said: “Exchanges are still going through, we’re taking reservations, and inquiries are still coming through, and those are the only markers we have at the moment.
“We’re looking at how to move forward as a board and have contingency plans in place, as there is a lot of uncertainty, and that fear in the public could translate into a slowdown. If that market slows, we need to act accordingly, but still produce a product that people want to buy.
“We’re not looking to reduce prices just yet, but we are cautious, in line with a volatile market.”
Several larger nationwide housebuilders such as Lovell, Barratt and Galliford Try were cagey about commenting on the state of the regional market, with the common view that it’s “too early to tell”. However, a statement from Barratt’s chief executive David Thomas, said the housebuilder was “prepared”, and that he expected the fundamentals of the business to remain unchanged despite Brexit as “there is a structural undersupply of quality homes in the UK, and we have a clear strategy to address this, supported by a strong balance sheet to execute our growth plans.”
In Liverpool, Alan Bevan, managing director of agent City Residential, said he was yet to see a change in the levels of buyer interest. Bevan explained: “There’s been a lot of uncertainty but it has been business as usual to some degree. It’s very early days, and we can’t say if there’s been an impact. We’ve not lost sales or deals; some vendors have panicked and looked to reduce prices but we’ve told them to hang fire for a while.
“Uncertainty is likely to impact sales, but we’ll just have to wait for that to play out. In Liverpool city centre, there’s still an investment story and a lack of rental stock. I don’t think we’re going to fall off a cliff, but it’ll be no surprise if there’s a lull in transactions in the next four months.”
However, there have been reports of house sales falling through. A vendor in Salford who had accepted an offer told Place that the buyer dropped out over the weekend “citing Brexit fears”. Another potential first time buyer said that they were considering waiting until the housing market looked more certain.
Homeowners are also putting restoration projects on hold. Alexandra Kington, North West marketing manager at financial advisor PwC, bought a house for redevelopment earlier in the year. She said today: “We just bought a project house and are considering putting it on hold, money is better saved than spent. If we hadn’t bought it eight weeks ago, we wouldn’t be buying it now.”