As we approach the end of the year we find ourselves in politically turbulent times, with the Brexit debate continuing to undermine confidence, but only slightly. Certainly there are some scary concepts being tabled, not least the Governor of the Bank of England suggesting that a no-deal Brexit could trigger property price falls of up to 35%.
Far be it for us to argue with the Governor, but this rather dramatic suggestion relies on a) a no Brexit deal and, b) drastic falls in transaction volumes which are already relatively low as there are very few speculative sellers in the market. Most current sellers have a genuine reason to move – marriage jobs, divorce, children, debt, etc, and these situations are unlikely to be especially affected by any Brexit outcome. In fact, anyone likely to be affected by the long-running Brexit confusion already has been. There are still far more prospective buyers than sellers (especially as it is generally cheaper to buy than to rent) and this is unlikely to change unless money supply were to dry up. This is very unlikely as banks are becoming increasingly competitive to secure any potential fall in mortgage business. Remember, prices only fall when there is an over supply of stock in relation to demand.
Sales to first time buyers, especially, continue to rise and now represent over 23% of the market.
In terms of house prices, whilst Prime Central London may have already dipped by nearly 15% in the past four years, these properties are being sold by extremely wealthy individuals for whom a dramatic price reduction that enables a quick sale is hardly painful, but gets the job done! For everyone else, it’s business as usual, although potential wobbles in market confidence suggest that sellers would be well advised to listen to the advice of a trusted agent – not one who seeks to flatter with an over-optimistic asking price.
Certainly this is the wrong market to be sitting on a property that goes stale on the market, as buyers seek to take advantage of negative media reports, whether of not they turn out to be true! We always find that those properties that sell first tend to achieve the best price too. It is also essential to ensure that your agent is particularly strong in their buyer qualification and sales progression activities; glitches down the chain in a nervous market must be avoided at all costs.
Confusing times? Maybe. But hey, Christmas is round the corner and we look forward to helping our clients take advantage of the traditional spike in activity over the festive season.
Neil Newstead, FARLA MNAEA MIRPM
CEO – Oakfield Estate Agents