The year 2016 started with a big bang and the first two-quarters were amazing as far as London property market is concerned. However, the third quarter brought a big turmoil in the form of Brexit decision. Yes, property gurus expected the immediate shocks. However, as three months have passed already and there are still signs of a little bit uncertainty; it means that the market sentiments shouldn’t be underestimated.
Experts feel that the developments that took place in 2016 have completely changed the market behavior of London property market. Irrespective of the area, the whole London market shows different trends as compared to the previous years. What are these things and how do they different from earlier?
What is the change in the buyer’s perspective?
First of all, the changes in the stamp duty which happened in the month of April, quite before Brexit; caused a dramatic shift in the activities happening in the letting sector? Since there were several rolling news around, letting agencies and renters were busy after April.
Now, renters are looking for cheaper properties. Therefore, single bedroom and double bedroom properties are a hot cake. Not many people are looking for bigger apartments and homes of three or four bedroom options.
Since London is always a place that keeps ticking, irrespective of the economic conditions renters are still on for the city. It is the reason; London property prices didn’t show exceptionally high or low points. On the contrary, it showed pretty stable behavior.
The shift from 2015
Almost every property dealer mentions the stamp duty increase when you ask about the biggest game changer this year. The majority of buy-to-let lenders insisted let instead of sell. Therefore, the market got flooded with rental properties. London letting industry was overall more positive than the selling market. It is a major change as compared to 2015.
Also, predictions indicate that people will be more inclined towards buy-to-let sector not only in 2016 but also in the year 2017.
What do experts suggest to renters?
As we say, renters have a party time today. The prices are at the bottoms, and you have very few people around looking for rental properties. Hence, landlords are eager to rent. No wonder, they offer an incredibly good deal if they feel that the buyer is serious. Well, in such a situation renters shouldn’t waste time in thinking. Rather, they should quickly go through the property details and finalize the rental agreement. According to experts, the market is going to be great for renters.
After initial setback, London sales are booming again
Buyer’s and seller’s market of London recovered after two major setbacks; 3 percent increase in the stamp duty in the month of April and later the Brexit issue. However, today property in London is again the leading global asset. Reports say that even the international investments have reached to the previous levels after July.
There is some change in the trends, though. There is a little bit reduction in the number of investments for buy-to-let. Also, what properties are being searched by customers and who are searching for it are different from earlier.
What is the advice from experts?
The latest reports say that the overall property market in London will gain the momentum again in the coming months. However, a few experts feel that it may take one or two years also. Sales people are busy in highlighting the lower prices and higher availability so that buyers change their mindset quickly. They create a sense of urgency by dragging the attention to the fact that the current market gives the opportunity to buy more for the money. With their specialization, buyers can get a great deal.
Certainly, buyers are getting influenced by the lowered prices than the sales tricks. Nevertheless, it is good from the market perspective if more buyers enter the buying arena. It is also good for sellers as they have more prospective buyers that earlier.
The Brexit impact
The property prices in London were conquering new heights month after month before Brexit. However, one month after it, every segment of the market showed strange behavior. Since the currency plunged, the property rates dropped significantly. Investors all over the world considered it the best opportunity to buy high-value properties in London at throwaway rates.
Some of the big construction projects went into a standstill state. Even the top-rated builders of London also showed signs of cutting the pace of the construction.
What will be the scenario six months down the line?
The length of the Rent contracts will have a definite impact. More rental flats will be there in the market because many people who were planning to sell the properties now decide to rent it out. They are edgy due to the post-Brexit scenario.
Surprisingly, super-deluxe properties didn’t show any signs of turmoil even after Brexit. They are still soaring high and high. Expensive flats are getting introduced in the market regularly. Certainly, not all of them are getting sold.
For high-value properties, there is a big change. Developers are ready to slash down the prices if they feel that the deal will get through surely. Two years ago, developers were not ready to cut the offer price five percent below the asking price. Now, they are ready to scale it down 10 percent if the deal looks positive.
There are cases when two or three-bed flats those are still under construction and there is no possibility of handing over the keys by next year; are getting marketed at prices that are less than the original price tag of the developer.
The super luxury market in London was undoubtedly quiet after Brexit, but the confidence is returning. Economists feel that as the situation becomes clear, the buyers-sellers and property dealers will make a great coma back, and the property market of London will be buzzing again. It is just a matter of time. Market sentiments are driven by the changes happening in the economic and political scenario. Hence, the echo lasts longer!