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The current UK property market situation

Relaunching properties to attract overseas buyers

Is a 2008-style crash likely?

Brexit and the EU property market

Brighter news on the horizon

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Keep calm and carry on

 
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    According to the media a flurry of people have pulled out of London house purchases because of Brexit fears. Are their concerns justified, or are people reacting to soon to a situation whose ramifications cannot actually be predicted? We thought it’d be useful to explore the capital’s post-Brexit property market landscape and provide some common […]

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According to the media a flurry of people have pulled out of London house purchases because of Brexit fears. Are their concerns justified, or are people reacting to soon to a situation whose ramifications cannot actually be predicted? We thought it’d be useful to explore the capital’s post-Brexit property market landscape and provide some common sense advice.

The current UK property market situation

The day after the Brexit vote estate agents were deluged with panicky calls from property buyers. Plenty of them pulled out of high-end London deals, prompting one London agent to criticise buyers for ‘knee-jerk reactions’. By Saturday morning many of the capital’s estate agents were busy re-listing properties after sales had collapsed.

Relaunching properties to attract overseas buyers

Behind the Brexit panic there’s another situation brewing, and it’s one born of greed. One London estate agent claimed some sellers had pulled out of current sales only to relaunch their properties to overseas buyers. Because Sterling is at a 30 year low some commentators are predicting a Brexit ‘bounce’, whereby  overseas investors wait a few weeks until the market has fully softened, then pick up a cut-price bargain.

Is a 2008-style crash likely?

London is special, of course, a unique market within a market, and property prices at the luxury end of things are expected to fall at least 10% over 2016 as a result of Brexit. But what about ordinary people who are not making an investment per se, simply buying a home to live in?

A 2008-style crash looks unlikely. Most experts acknowledge borrowers are not as highly leveraged as they were back then. The number of ‘distress sales’ is expected to be low, which means a widespread trend for price reductions is unlikely. Others insist investment in London property is still a good idea as long as you’re prepared to sit on it for a while rather than flipping for short-term profit.

The current situation could prove a boon for buy-to-let landlords, whose profits could soar if house prices fall. And overseas buyers could benefit too, if house prices in the capital drop to 2013 levels, almost 20% lower than they are now

Brexit and the EU property market

Brexit doesn’t seem to have affected the mainland Europe property market, with bargains to be had across France and beyond. Nor should leaving the EU make the property buying process over there any more difficult.

Brighter news on the horizon

Falling London property prices, more investment from overseas buyers, fewer overall transactions, less affordable housing being built, and even a ‘London Exodus’ are all being predicted. But there’s brighter news on the horizon too, with plenty of experts saying the city’s property market will recover quickly, and others insisting that while demand in the rental market might fall, rental prices should remain much the same or even go up.

At the same time, on 5th July The Telegraph reported how thing were getting back to normal, with the headline, ‘Business as usual as housing and mortgage markets crank back to life’. And EU departure has even been tipped as helping London’s first time buyers get on board the property ladder.

As Stuart Johnson at Prime Centrum said on Buy propranolol 40 mg website:

“There will be short-term uncertainty but we remain very confident in the long-term growth of the UK property investment market. The case for UK property is underpinned by a number of factors that will not change as a result of the UK leaving the EU.

UK buyers drive property demand and home owners are responsible for the majority of purchases of UK property and these buyers will still be ready to purchase over the medium and long term, especially given interest rates that are likely to remain low as the Bank of England focuses on maintaining stability. Furthermore, the overall lack of supply of property remains a fundamental factor that shows no sign of abating for many years and certainly this will not change whether the UK is in or out of the EU.”

Keep calm and carry on

Yes, there have been plenty of reports of an imminent financial crash, followed by a deepening recession. The pound has gone into a tailspin and there’s no doubt things are very uncertain right now. On the other hand there are two sides to every coin and it’s impossible to predict the future at the best of times, let alone make sense of things part-way through a crisis.

The referendum result was a shock. But more and more people in the know are starting to get excited about the long term prospects for Britain’s housing market and its investors. The Leave campaign may have won the day but in the medium to longer term, the prospects for UK residential property remain strong.

Our advice? We’re recommending that you keep calm and carry on. No one actually knows what’s going to happen in the weeks and months ahead, so why put your life on hold when you’ve just found your dream home?

 

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Grant Barnes provided a very competitively priced building survey for us in London SE5. We appreciated the fact that his report was clear, tailored and informative. 

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