It is still too early to evaluate the full impact of the EU Referendum on the UK property market, both at a national and local level. The dramatic turmoil that was expected following the Brexit vote has not materialised and although trading conditions remain tough, interest remains in both the London and country markets, which is indicative that perhaps confidence is returning.
The Brexit vote meant that vendors became more realistic on price which led to an increase in successful sales throughout July and August. The London and country residential markets remain price sensitive although we have noticed an increase in activity, especially amongst needs-driven buyers who want to get on with their lives. Investors understandably remain more cautious and will only commit when they feel they are getting the right deal.
As we enter into the autumn market The Buying Solution has an active list of motivated clients looking to purchase and we predict frustration amongst buyers as selling agents are reporting a limited amount of new properties coming to the open market. “Best in class” properties set at realistic asking prices are likely to attract premiums as there will be competition for them but those that are unrealistic on pricing will continue to flounder. The lack of supply we are now experiencing could be a temptation for vendors to become more bullish on their pricing but general sentiment amongst our clients is that they will only be prepared to offer if they feel a property is realistically priced.
Stamp Duty (SDLT) has undoubtedly had a far bigger impact on our markets than Brexit, especially with the extra 3% for second home purchases, particularly at the £5m plus level. In the country, buyers of houses with 20 plus acres of grazing or farmland are likely to qualify for “Mixed-Use” which is definitely helping the farms and estates markets as it allows the buyer to claim a reduced rate of 5% on SDLT, even if it’s a second home. International buyers both in London and the country are also taking advantage of a weak pound which often off-sets the increase in SDLT.
Within the London market it is hard to predict if the autumn market will materialise this year. There is little certainty and no rush to make the commitment to buy. The market is currently fairly stagnant and prices continue to slip. There are deals being done, especially at the very top and the very bottom ends of the market where sentiments are very different, but the prime market continues to struggle.
In London the autumn market is likely to see a delay until mid to late October, so the remainder of September is likely to be an extension of the summer buying period and as such may be a good buying month if the right property can be found, as the competition will be less.
The changes in the property market have affected price levels in all areas of the UK and this has meant there is a greater need for client care as many people are unaware of the change in direction and how to use it to their greatest advantage. There is also likely to be an increase in the amount of property offered off-market in the coming months. Retention of a buying agent who will work on behalf of and for the benefit of the buyer, as opposed to the vendor, provides comfort and often much needed counsel in an uncertain market, as well as ensuring access to private offerings.