27 Jul London Housing Market After Brexit
LONDON HOUSING MARKET AFTER BREXIT
Home House Buyers have been in the property business for many years, we have worked through 2/3 property meltdowns but none quite like what we are experiencing with Brexit. During the 2007 property crash, it was a gradual decline in sales as banks began to fall apart, with Brexit the crash has been overnight with property prices dropping by 10-15%.
Vendors looking to sell house fast London are undergoing a wave of discounting on their original asking prices after the Brexit vote. Vendors cutting the asking price on their properties surged by 163% in the 14 days following Brexit compared to the two weeks prior.
Although its only early days, these cuts have failed to stimulate the market. Completions have fallen by 18% from before the referendum and are down 44% from the previous year. The Brexit vote has affected homes going under offer, dropping 33% from pre Brexit period to days after the vote. These figures suggest that vendors looking to sell house fast London need to hang on for 18 months or take a hit on price if they are wanting a quick house sale now. With prices being cut this will help the market recover, buyers will return when they feel comfortable that the price is right and they are getting better value for money. Whenever markets do fall there is a point where buyers that they are insulated from any further falls.
London isn’t the only area of the UK feeling a market drop in the housing sector since the Brexit vote, areas such as Teesside, Hull, and Liverpool which haven’t really recovered from the 2007 recession are the ones feeling how much more can their properties drop.
Estate Agents in the London have reported that in the wealthiest areas where many homeowners are foreign residents seem to be worrying about their stance in our country after the vote ie do they need a visa when we do leave the EU. This worry has also made other foreign residents looking to buy which has pushed down prices in these wealthy areas in some cases by 15%. On the other hand, you have the foreign investors whose main currency is the dollar who can benefit from the drop in the pound, the pound lost 11% against the dollar since the vote, this can help potential vendors sell house fast London.
During the UKs economic history, it’s had a very unhappy one with credit led booms, which is usually followed by a housing market crash. The last time was in 2007 when the UK government had to nationalise two banks to keep them solvent.
“Londons housing market has started to see Middle Eastern investors coming back into the marketplace with the weak pound which makes properties more appealing for this kind of investors buying with US dollars,to let.” said Scott Mcardle MD HHB ” Some property investors are seeing Brexit as an opportunity, whereas others are concerned”.
Since the 2014 and this year’s stamp duty changes the property market has started to see less and less activity especially in the high-end market, this has not helped vendors to sell house fast London, the 2014 overhaul disrupted the high-end property market making them more expensive to purchase, then this year 3% increase on second homes has seen the buy let market slow down dramatically. It is reported that during the first quarter of 2016, prices for high-end homes were down by 10% from their peak in 2014, Mayfair and Knightsbridge are hardest hit with prices being cut by around 12-13%.
These kinds of discounts have affected new builds going on in the city with developers struggling to sell off plan, where they could take deposits of 20% where the buyer could pay the rest on completion or sell onto a new buyer before the date of completion. According to an advertisement on RightMove one owner is nearing completion of his new build and is looking to resell for a price lower than what was agreed in 2013 he’s definitely struggling to sell house fast London.
The commercial property sector has been hit hard in the wake of Brexit with investors in commercial property funds cashing out their investments, which saw two or three big funds refusing to let investors take any more money out and insisting that they give 3-month notice period before they do.
It all looks like doom and gloom at the moment for the property market, but when all the fear mongering and the dust settles the property market will recover, don’t panic.