Doom and gloom have risen over the property market in the past months, especially focusing on the estate agency sales market. A question that is frequently asked of me is “Surely Lettings is doing a lot better than Sales isn’t it?”. But is it? I believe it is all a scare/ shock tactic of the EU referendum. As a first time buyer looking to purchase a property in South West London, I have had conflicting advice. I either hear “NO – do not buy now just after Brexit, bad idea WAIT” or “Yes April, it is a perfect time to buy, mortgages are at an all-time low!”.
So what is the truth?
What is the estate agency sales market currently like – behind all the façade of the UK exiting Europe?
I have researched this vastly for the past week, in property news, and speaking with brokers, Sales Managers, Sales Directors and various other estate agency professionals. It is clear that uncertainty shook the Sales Market after Brexit. The Guardian stated uncertainty of the EU Referendum drove the largest fall in people trying to buy a property since the Financial Crisis. The Institution of Chartered Surveyors (RICs) has also suggested the number of homes for Sale has declined more rapidly than at any other time since they started gathering information in April 1999! (Rics) have also stated that at least 1.8m more households will be looking to rent rather than buy a home by 2025. This has been proven by tenancies also increasing from 2.3m in 2001 to 5.4m in 2014. House prices in London are the second-most over-valued of all the world’s major cities, according to investment bank UBS.
The Guardians research, however, contradicts with figures showing the Brexit vote in June has not collapsed all consumer confidence which was so feared – Christen Lagarde stated prior to the EU Vote, that voting to Leave would lead to a crash in house prices. Whereas house prices have grown in September, and August by 0.3% and 0.6% according to their research.
Deutsche Bank analyst Reiff and Scheulfer made a huge case (over 70 pages worth) arguing that for any investor the economics in the London Property Sales market have been HAMMERED according to the FT times. The analyst’s state three main things to prove this fall – the tax deductions in 2015 have been restricted for higher income buy-to-let landlord’s. Secondly, increased stamp duty on buy-to-let and second homes, lastly changed the way landlords report their income, forcing them to register their gross rental income rather than the net income.
Facts, figures, stats and everything shown – People will still always buy in London, it is one of the most sort out cities in the word (even though it may be one of the most overvalued…). It will always be somewhere we (well me), will want to buy in.
What do you think? Is the Sales property market REALLY doomed? Or will it get back to normal as some facts have shown?…
I will keep you updated with my first time buying process.