British property market set to be slow until after Brexit in March 2019
The British property market is likely to see a slow start to the new year, with continued concerns about Brexit expected to affect buyer and seller decisions until after the UK leaves the European Union in March.
The market in London is likely to be the slowest, with fewer international buyers, mainly due to economic and political uncertainty, including Brexit, according to the predictions from property experts.
However, despite the market not being as buoyant as it was a few years ago, accurately priced homes will still sell, according to Nick Leeming, chairman of Jackson-Stops. ‘Over the last year there has generally been a mismatch between vendor expectations and the price that buyers are prepared to pay, particularly at the top end of the market, so properties launching now at a competitive value will stand out and attract buyers’ interest,’ he said.
‘In my experience the first working day after the New Year break is one of the busiest days for property portals, so for those looking for their home to be front and centre of the property parade this is a crucial time for marketing,’ he added.
Property consultancy Cluttons predicts that the London residential property market will fall a further 10% before prices begin to recover in a year to 18 months’ time.
This follows new Cluttons’ data which shows that average house prices are down 6.8% and 4.6% in prime central London and core central London respectively over the past 12 months, with no areas registering any increases.
‘The London market still faces significant challenges in terms of affordability, buy to let investors and outdated infrastructure. These factors are putting pressure on prices and the reality is that the sooner sellers take the pain and adjust prices down, then demand will start to increase and the market will start to go up as more buyers emerge,’ said James Hyman, head of residential at Cluttons.
‘Another important point that we need to remember is that overseas buyers haven’t left London, but they need to feel confident that they are getting fair value for money before they come back into the market. When this happens, they will be an important driver of recovery,’ he explained.
He added that in areas of core Central London where prices are now down 20% to 25%, properties are getting significant interest and selling in a good time frame.
It is likely to be a better year after Brexit, according to James Greenwood of Stacks Property Search. There are an estimated six million households living in the wrong property and the country needs to get moving. Only an end to the indecision that we have been suffering since June 2016 can free up the market,’ he said.
‘Whatever the outcome, we will certainly see a significant increase in activity. More supply will be matched by more demand and I don’t expect us to see any dramatic rise or fall in prices across the board,’ he pointed out.
He also pointed out that buyers and owners are increasingly prepared to take on significant work to make houses more efficient, and 2019 will see more eco retro-fitting and future proofing. ‘Properties that are inefficient will become harder to sell as buyers pay more attention to the running and maintenance costs they are taking on. Isolated houses at the end of mile long rutted drives will be hard to sell, but competition will be high for immaculate town houses in small cities and market towns,’ he explained.
‘However, cottages in tourist areas will be snapped up by investors jumping on the Airbnb bandwagon in anticipation of an increase in UK residents holidaying at home due to falling pound, airport delays, and Brexit fallout,’ he added.
It could be an interesting year for the Build to Rent market, according to Nigel Howell, chief executive officer of FirstPort Limited, and he predicts that there will be new institutional investors from Canada, the United States, France and the Netherlands.
‘Post Brexit the UK property sector needs to quickly mature our collective offer, taking learnings from alternative sectors and international equivalents, and to have a clear ambition. Now it’s time to take action to create a vibrant and long term market offer that meets investors’ demands,’ he said.