London Property Blog - What does Brexit mean for your property?
Welcome to your July edition of the Fish Need Water newsletter!
Well we didn’t see that coming, did we? (We’re talking about Brexit, in case you’re wondering.)
But what does it mean for the property industry? Will buyers, sellers and landlords all lose out? Should we be sitting things out, pouncing on opportunities, or giving up and emigrating to Greece (“while we still can”)?
Here’s our take on everything…
Property prices will be back on track in no time
George Osborne suggested that, in the event of a Brexit, property prices would drop by 18%. We cried “Cobblers!” then, and we’re sticking to it now.
Yes, might be a minor, short-term dip while everyone panics, but before long it’ll be business as usual. There are a couple of reasons for this:
- Interest rates are likely to stay as they are or perhaps even decrease to stimulate the economy. The effect? MORE people will get mortgages – not fewer, as Osborne predicted.
- Soon everyone will realise that nothing’s changed since 23 June. There’s still just as much supply and too little demand in London – and it’s exceedingly unlikely that immigration numbers will change to the extent that this is no longer the case. The one thing that will alter the balance of supply and demand? A concerted effort by the government to build more houses – but that’s a separate issue entirely.
We also have to remember that it’s in the government’s interests to keep house prices stable: when people feel confident that they have equity in their homes, they feel rich. When they feel rich, they spend. When they spend, it fuels growth throughout the economy.
Now is the time to buy
If there is any minor, short-term dip it may be the perfect time to buy. But remember that there’s likely to be increased competition for properties – and you don’t want to end up (ironically) paying over market value, simply so you can outbid your opponents!
There’s (probably) no need to take your house off the market
If you’re currently trying to sell your house, it’s understandable you’re concerned, but as mentioned above the fundementals of the market remain the same. Also bear this in mind, if your property has fallen or you get a lower offer, it’s likely that the one you want to buy has also fallen by the same amount.
Wealthy foreigners will inspire confidence
The pound has dropped in value (for now), which means it’s cheaper for foreign investors to buy luxury properties in prime central London.
While they wade in and grab every gold-gated, statue-laden place available, the rest of us can benefit from the “ripple effect” in confidence this causes.
Buy-to-let is still a great investment
A few buy-to-let bargains might come onto the market, but most landlords will do what’s sensible: they’ll keep hold of their properties and continue to collect rent. Nothing will change.
The long-term future for BTL investment is still just as bright as it always was. Immigration won’t change in any meaningful way, but let’s for a moment imagine it does. The UK birth rate is rising, and we’re all living longer. Just under 25% of all UK households are now occupied by a single person.
Demand is going nowhere.
Want to talk things through with us?
If you have any questions whatsoever about Brexit, house values, rental demand or anything else, we’d be delighted to have a chat!
Just give us a call on 020 3199 3439.
If you would like to keep up with local property news visit our PROPERTY BLOG HERE.
Until next month