April Fools Day was no joke for landlords, as they steamed ahead with their buy-to-let property purchases throughout late March, in order to beat the additional 3% stamp duty imposed on buy-to-let properties by the chancellor, George Osborne, after the 31st March 2016.  Speaking to fellow property professionals in East Dulwich, since the clocks went forward there has been a noticeable easing in demand for property from landlords.  This can be partly explained by the fact that some investors brought forward their 2016 property purchases to save the extra tax.

Then we have the much-discussed Brexit, which is having a cooling effect on the East Dulwich property market.  You may recall that I discussed this a few weeks ago; whilst a British exit will have an impact on the East Dulwich market – it is unlikely to cause the kind of apocalyptic scenario that some commentators are envisaging.   In one of my earlier articles, I described the growth rate of East Dulwich property values – whilst this rate is slowing, East Dulwich property values are still 5.26% higher year-on-year. The month-on-month growth rate has started to moderate, compared to the heady days of 2014/15 month-on-month rises.  It is interesting to note that a recent survey among members of the Royal Institute of Chartered Surveyors found that only 17% of respondents believed that property values would rise over the coming quarter, compared to 44% at the end of 2015.

All this had led to an increase in the number of properties for sale.   For example, in the SE22 postcode, there were 179 properties for sale in the postcode in December, and by the end of the first quarter, this had increased to 203, a 13% increase properties on the market.  If we look from Dec 2015 to May 2016, there are 28% increase bringin the total properties on the market to 230.  If you compare this with the same period the previous year (Dec 2014 267 properties vs. May 2015 239 properties) which was actually a 10% fall of available properties over the same period.

So it appears we are pretty much at the same point as last year in terms of stock levels, back then there was uncertainty in the market caused by the pending general election and its outcome, now it’s Brexit.  This is likely to result in a quieter second quarter with the market returning to normal once the Brexit vote is out of the way.

Nevertheless, I believe this easing of the East Dulwich property market is a positive trend, as investment landlords won’t have to pay top dollar to secure a property, because of a decrease in competition.  In theory, this easing should be bad news for the 7,208 homeowners in the SE22 area, but this may not be the case.  When they move, the majority of homeowners, tend to move upwards in the market, to a larger or more desirable property.  In this context, a homeowner wishing to move last year would have achieved a top dollar figure for their property, but would also have to have paid an even higher price to secure the one they wanted to buy.   The Swings and Roundabouts of the East Dulwich property market!

However, all the signs suggest that whatever the outcome of the EU referendum, in the long term, the disparity between demand for East Dulwich property and supply will still exercise a bolstering influence on the East Dulwich market. I would personally be surprised if, by 2021, whichever way we vote in late June, property prices were not around 20% to 23% higher than they are today.