Strong and stable housing market?
Halifax, this month reported the first quarterly decline in UK house prices (0.2%) since November 2012, annual house price growth however, remained at 3.8%. It would seem that warnings prior to last year’s EU Referendum that Brexit could lead to a 10% fall in house prices have so far, at least, proved unfounded.
Fast forward almost a year from the referendum and Theresa May has triggered Article 50 and called a general election that she looks set to win with an increased Conservative Party majority. Despite all the related economic uncertainty property prices and their relationship to income ratios remain at an all-time high. Despite signs the market may be cooling especially in Central London, there are good reasons to remain positive about prospects for long term price growth and market stability:-
- Availability of cheap credit – shortly after the referendum, the Bank of England lowered the interest rate to 0.25%, this has filtered costs savings onto the Borrowers underpinning mortgage affordability. Long term fixed price borrowing deals which remain available to credit worthy households.
- SDLT increases in April 2016 appear to have resulted in people being more reluctant to move, restricting the level of supply coming into the market.
- Years of low output and archaic planning laws continue to result in significant under supply with no sign of the gap being bridged.
- Sterling weakness has meant that foreign purchasers are effectively getting a 15% discount for their property when transacting in USD or EUR prior to the referendum.
- Help to Buy, this government backed scheme has been a game changer in bringing buyers and vendors of new build stock at up to £600k and will continue to be available for the foreseeable future.
The reality is that Brexit has not happened yet, formal negotiations are yet to begin and the current period of uncertainty looks set to continue, at least until the UK’s relationship with Europe is finally decided although this shows no sign of being resolved anytime soon.
Ingenious Real Estate remains very much open for business; we continue to expand both our team and our product range. Despite the ongoing uncertainty, we are winning mandates, have a growing pipeline from both new and existing clients, drawing on our experience, contacts and flexibility.
If you have any opportunities you would like to discuss with us or would like to know more about any aspect of what we do, feel free to get in touch. We can normally provide an indicative response within 48 hours.