The market is stirring. The holidays are now becoming a distant memory, schools are back and anyone who intends to move in time for the New Year is beginning to think about doing so.
Although nationally activity levels remain unexciting, and, as a consequence, prices are remaining high, there is an indication that this could be about to change, led as ever from London, where, according to Savills, prices have fallen by 3.2% since the beginning of the year.
We can see two possible reasons for this about-turn. First, the Brexit referendum and subsequent election introduced confusion and severe uncertainty to an already fragile market. This led to a log-jam of people who would have liked to have moved, but were nervous to do so. No that the shockwaves have passed, they once again feel more confident about moving.
Secondly, talk about the possibility of SDLT (Stamp Duty) liability being passed from buyer to seller has encouraged a number of sellers to bring forward their plans to sell. This makes sense, although if those sellers are also buyers then it’s probably swings and roundabouts.
Whilst we do of course welcome the expected increase in activity due to a rise in the number of properties coming to market, sellers should always be conscious of the effect of this increased competition at local level. Always take the advice of your experienced local property expert rather than relying on online valuations, which are notoriously inaccurate as they rely on the history of past sales, not on the reality of what is currently competing with your own property for sale!
We do expect the lower end of the market to become more accessible to first time buyers, and sales to this sector are already up 17% over the past two years. This is no doubt due to the fact that Buy-to-Let investments are proving less attractive to the “amateur landlord” with BTL purchases down 17% in the same period (Source: Land Reg). This could be due to a much tougher SDLT and personal tax regime, freeing up properties that would otherwise be let. Sadly for tenants, this effect is already being felt, with 35% of rents having risen (source ARLA).
Until the Brexit issue is finally resolved (ha!) the market will remain difficult to predict, but in the meantime, we’re helping our clients make hay while the last of the summer sun continues to shine.
Neil Newstead, FARLA MNAEA MIRPM
Chief Executive Officer