As we head into 2019, the outlook for the property market appears bleak. Mark Carney, the Governor of the Bank of England, has suggested that, on a worst-case scenario, should there be no deal post-Brexit UK, property prices could fall by circa 35% over three years.
Often, during difficult periods, including times of crisis and recession, estate agents have relied upon the certainties of death and divorce to fuel the property market.
In a divorce, the main assets which a party or a couple may have are attributable to property and pensions, the property being the most liquid asset of the two. Those being required to sell their home during this time often regard the idea as being problematic and the possibility of purchasing a home during this time as risky. Unfortunately, if parties have been mandated by the court to sell, sitting around may not be an option. The options many couples are now facing is to sell now, only to find yourself a buyer in a positive outcome to the Brexit world, with prices being driven down. The alternative would be not to sell now and lose the opportunity of someone buying the property as the market falls.
Parties who have invested in the Buy to Let market face even greater uncertainty, as the net value of each property will also have to take account of Capital Gains Tax payable on each sale or transfer, a calculation which will need to be completed by an independent financial advisor to whom parties would provide details of the value of each property.
It therefore comes as no surprise that a recent court case has made the possibility of existing Court Orders and Agreements being reappraised. The case of US v SR  EWHC3207 (Fam), where a High Court Judge in London acknowledged ‘the near collapse of the Russian property market over the intervening months and years’ led to a delay in the sale of a property in Moscow and a significant drop in its value. The Judge decided, two years after the original Order, to significantly alter the decision against a backdrop of one of the parties representing themselves and the other dependent on the generosity of their historic legal representation.
In relation to the property which the parties held in England, it stated ‘The best offer which has been received to date is £1.18M … the lack of interest from purchasers to date at the agreed valuation of £1.5M may very well be the result of the general uncertainty in the property market (the national Brexit effect)’.
The uncertainty, risk and speculation of the ramifications surrounding Brexit are undoubtedly going to have an impact on the divorce process and those wishing to divorce in 2019. Whilst many may say that this is a positive step for society, this does not assist those locked into a toxic home environment, with all the emotional damage that goes with it.CONTACT US