The on-going uncertainty surrounding the Brexit vote, coupled with a summer holiday slowdown, has led to a fall of more than £3,600 in average house prices across the whole of the UK. It has also been noted that the number of days to sell a property has increased in London and the south east commuter belt. However, before home owners work themselves up into a frenzy, it is important to consider the fact that it is not unusual to experience a summer slowdown and we won’t know the full story until we see the outcome of the traditional housing market rebound in the autumn months.
This poses a sharp contrast to earlier in the year when a hike in stamp duty led to a surge of 12% in property transactions in comparison to the previous year. This was accredited to landlords rushing to complete transactions to avoid an increased levy on buy-to-let properties.
While it may well be beneficial for first time buyers, the continued uncertainty following the Brexit vote has led to a well-documented drop in overall consumer confidence with the Royal Institution of Chartered Surveyors claiming that they had seen the fastest decline in property sales since the global recession in 2008.
This provides us with a sharp contrast to the rental market where there has been a significant increase in the number of properties on the market. However, due to increased demand across the whole of the country for rental properties, there is also a suggestion that this increase in properties is due to the earlier issue that was raised regarding the number of buy-to-let landlords rushing to complete deals and subsequently putting the properties on the market.
There is, however, a fascinating insight that has recently emerged with regards to the London housing market. The capital has long been regarded as something of a safe haven in terms of housing, with the value of property increasing immensely year after year, regardless of the economic conditions in other parts of the country. However, it has emerged that rents in London have fallen annually for the first time in six years due to growing uncertainty surrounding the city’s continued prosperity following the Brexit vote and the suggestion that it could lose its EU passport, which would ensure that it loses its ‘financial capital’ status.
This shift in the property landscape presents an interesting time for London-based landlords and it is one which they will potentially have to adapt to if they are to maintain a higher level of rental income. A shift in focus onto the growing number of overseas tenants could well prove to be a shrewd move due to the fact that more and more wealthy students and young people are viewing London as an essential destination to cross off their list. This has led to an increase in those seeking out landlord furniture packages as a way of luxuriously furnishing their properties to appease the tastes of their wealthy tenants and avoiding the prospect of having to heavily invest in upmarket furniture.
However, it remains to be seen whether or not this trend will continue to offer prosperity due to the fact that there have already been surveys suggesting that around a third fewer international students will choose to come to the UK and study following the unprecedented vote to quit the Union. It appears that this period of uncertainty will continue until Britain’s future relationship is with the EU is finalised.