By Dylan Setterfield, senior forecasting editor, Cap HPI
Since we awoke to hear the nation’s decision on the referendum last Friday, the news channels have remained full of experts sharing their views on what this will all mean.
If we look at the data in the run-up to the referendum, very little seems to have changed from the usual seasonal patterns.
Regarding new car sales, a sustained reduction in sterling could act as a brake on the manufacturer activity that has been forcing the market over the past 18 months, although we were expecting a slowdown in the second half of the year in any case. Clearly, this would have a positive impact on nearly new used car prices, which have been under significant pressure in recent months.
However, it is important to note that the reduction in currency rates has been against the US dollar – and the euro has also fallen against the dollar.
We remain in the European Economic Area free trade zone. It is in all parties’ interest to retain the status quo in this respect since, for example, we are Germany’s single largest export market.
As we predicted, and contrary to the view expressed by some others, in the lead-up to the referendum there was no reduction in used car activity. No-one is going to pay less for a used car today or in the coming weeks as a result of the referendum vote last night. It’s unlikely that someone who needs a car is going to postpone their purchase.
Some of the best deals currently offered on new cars are likely to become slightly less attractive shortly, but this should be perceived by the industry as a positive outcome.
We have seen quite a benign market in June following the readjustment through the month of May, and we may see a slightly larger downwards movement in July as a result, but this would not be as a result of the EU referendum.
We will continue to review our macro-economic assumptions, but there will be no knee-jerk adjustments to new or used car forecasts.