One year on since the dust from the referendum began to settle. As you may have read, some reports are painting a rather rosy picture of it all. But whether these reports are Brexit camp biased can (and should) be deliberated. We’ll aim to provide you with an unbiased picture of what’s happened to the UK property market and what could happen over the coming months.
What do the numbers tell us?
The positive numbers from the Office for National Statistics show UK house prices to be up 4.5% in the year to May 2017. However, it’s also important to consider house price growth - and this number is starting to stabilise. Recent figures from Nationwide show that house prices have peaked for now and growth is steadily decreasing - down to 2.9% in July.
Other research from HomeOwners Alliance and BLP insurance found that 7.5 million people in the UK have postponed plans to move this year. 25% said this was due to increases in living costs and nearly 16% said that their decision was due to Brexit. Another 25% said it was due to the difficulty in securing a mortgage or remortgaging, which is reflective of the fact that lender appetite is down.
What’s happening to the property market in London?
In Q2 2017, London house price growth slowed even further to 1.2% - the slowest growth since 2012 and falling behind the rest of the UK. Perhaps as a result, there are 13.7% fewer homes coming to market in London (according to Rightmove).
A potential reason for this could be that wealthy buyers are concerned about Brexit’s impact on the financial services industry (which employs most of London’s highest earning professionals), making high earners reluctant to commit to buying property in the current London market. Buy to lets may also be declining due to high stamp duty costs and tax changes to profits on rental properties.
It’s also likely that wealthy international buyers are looking elsewhere, despite the opportunity of a depreciated pound and falling property prices. International property buyers have greater exposure to inheritance taxes, capital gains, and may also, if they are from the EU, may be concerned about their long-term right to live in the UK after Brexit is effected.
So what does all this mean?
Well, this all reflects weaknesses in the UK housing market. Simply put, people are buying and selling less homes. For how long this will continue for is still unknown and is likely to depend on what terms are agreed for Brexit and the resulting impact on the UK economy.
If the pound weakens even further, inflation rises, and interest rates are increased, the capacity for house price growth will be reduced. Equally, if Brexit negotiations go well, economic growth continues to remain positive, and confidence is boosted as a result, house prices could increase earlier and at a faster rate than initially thought. Let’s hope it’s the latter.
What does this mean if you are looking to sell your home?
It’s not all doom and gloom in the UK property market. Remember that these are macro-level statistics and there are certainly pockets of the UK (especially within London) that have seen significant price growth in the last year - London Borough of Hackney is a great example.
There will always be buyers out there. You just need to have a great estate agent to find them - this is where Sellmyhome.co.uk can really help. Not only do we market your property on Rightmove and Zoopla, we proactively find potential buyers through our social media advertising tool. Our agents vet and look after your potential buyers with the greatest care, and what’s more, we’ve proven that these techniques generate a higher % of offers as a result. Plus, as a nice substitute for stagnant property price growth, you could save thousands on estate agents fees with Sellmyhome. We don’t charge a commission (just a flat rate from as little as £695).
If you’d like to find out how much Sellmyhome could save you, click below to get a FREE valuation of your property, or simply get in touch.