Brexit and beneficiaries – selling an estate
Brexit. The subject has rarely been absent from headlines in recent months. With the upcoming EU election merely days away, it will return to the forefront of the minds of the electorate; even if merely to spoil a ballot and express dissatisfaction of the stagnant political process.
For those also suffering a bereavement and dealing with the sale of a property in the deceased’s estate, the never-ending Brexit saga (now bumped to 31st October 2019) adds a whole new obstacle to surmount.
The RICS has predicted, for some months, a decline in market confidence, and indeed its latest UK Residential Survey results from April 2019 reflect a negative trend in property for sale for the ninth consecutive month.
A look at the February 2019 UK House Price Index published by the Office of National Statistics has shown a general slow down in property price growth rates over the past two years. The average house price increase in the UK was 0.6% in the year to February 2019. We need to look back to September 2012 to see a lower figure of 0.4%. Overall this predicts a listless property market for the near future.
Reasons for the market slowdown
I have heard anecdotal evidence from client executors of the recent difficulty in finding buyers for the estate property. Reasons for this appear to be many fold, and have been reported on for the past couple of years.
Sellers are reluctant to move when they may lose equity in their property on sale and buyers may find it difficult to obtain a mortgage, particularly those purchasing their first property.
In order for a chain of property sales and purchases to be successful, there ideally needs to be a plethora of such properties on the market in the first place. It is clear that the general uncertainly surrounding Brexit has had a knock on effect on the sustainability of house prices. Why make the largest potential purchase of your lifetime only for it to immediately lose value? For buyers requiring a mortgage, the spectre of negative equity is an even stronger incentive to remain where you are.
Where does this leave executors?
The current buyer/seller ‘wait and see’ approach has become popular and will probably remain with us until we know how Brexit will pan out. Executors don’t always have this luxury. Until sold, the estate funds remain trapped in bricks and mortar. Executors are often trapped between the rock and a hard place of being under an obligation to obtain the best price possible for the beneficiaries and the estate, and ongoing costs of maintaining an empty property, such as insurance.
We cannot predict what will happen between now and 31st October 2019, it is difficult enough to know what the result of the EU election will be. We can however guide you through this minefield.
Our expert solicitors in our conveyancing and estate teams work collaboratively to ensure that the sale transaction moves as swiftly and smoothly as possible. We work with a number of well established and respected estate agents, who can assist you from initial marketing all the way through to a successful sale and distribution to beneficiaries.
For more information on selling an estate, please contact Lindsay Taylor.