The property market apocalypse predicted by some following the Brexit referendum appears to have been averted. However, the timing of the referendum, combined with the 1-2 month lag in the reporting of sales figures has made it difficult to assess the real impact.
The latest sales figures reported by the Land Registry/ONS suggest a 10% decline in transaction volumes against the same time last year, but this could simply be a result of April’s rush to beat the Stamp Duty increase on second homes and buy to let investments. House prices are reported to have risen by 8.7% nationally over the year with the average property now standing at £229,000.
The important thing is to look at the snapshot of activity right now. We’re at the tail end of summer, yet demand remains high.
Rightmove has reported a 1.2% decline in asking prices of new-to-market properties in July, but this is usual for the time of year and nothing seems to have changed significantly enough for us to expect anything other than the usual Autumn boost due to commence shortly. Indeed, this month’s announcement of a new record low BoE base rate to just 0.25% can only help and this has been followed by announcements of exciting mortgage products that point to the City’s long term optimism (eg 7-year fixed rate at 1.99% by Coventry BS). So borrowing continues to be particularly cheap, with risk being reduced by these long term fixes.
Its early days but the signs are looking pretty good for the local property market. Sellers should however, forget about the last 3 years and focus on the “new” market, with correct pricing ever more important.
In the local lettings market there is high demand for 3 and 4 bedroom houses where shared HMO lettings are permitted (3 or more occupants consisting more than 1 household). Advertised stock levels (rightmove – Leytonstone / Leyton) had been increasing; however in the past week the number of available 1, 2 and 4 bedroom properties has dropped slightly, with 3 bedroom properties remaining the same. We will be monitoring the market very closely in September to see if tenant demand floods back in to mop up the supply.
Over the coming months we hope to see more buy to let investors enter / re-enter the market, with property still seen by many as an excellent long term investment.
We spoke with Marcus Whewell, CEO of The Guild of Professional Estate agents, which has a national network of approximately 800 carefully selected independent estate agents, and he told us this.
“The market (outside of London) actually looks steady and predictable. Prices are holding up, properties are selling (on average) for at least 99% of the asking price and withdrawals are no higher than pre-referendum. Mortgage rates continue to be the most competitive in history.”
Marcus goes on to say
“London is a slightly different story Brexit essentially acted as a catalyst to the inevitable correction to the overheated prices present in the Spring. Offers, prices achieved and completions all adversely affected at least in the short term. The London market has always fluctuated more than the rest of the UK as overseas and speculative investments help drive activity.
“Looking at the bigger picture, there are strong reasons to believe the residential market will remain healthy for the next few years”.
“The UK population is expected to continue growing by up to 50,000 per annum and to meet demand the UK needs at least 200,000 new homes every year. Currently, less than half this number are being built. This is only amplified by the changes in trends and demographics such as more single-person households.”